Trai drops plans for carrier access code

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New Delhi, Aug 19: There’s bad news for telecom subscribers looking forward to choosing an operator for their long-distance calls. The Telecom Regulatory Authority of India (Trai) has decided against implementing the long-awaited carrier access code (CAC). The regulator will make an announcement to this effect on Wednesday stating that as long-distance (STD and ISD) tariffs are already quite low, there’s no need for CAC.

CAC is a mechanism that allows subscribers to choose a long-distance operator, irrespective of their service provider. For instance, a BSNL subscriber could make STD/ISD calls using Bharti’s network by dialling a particular code. The move would have led to fierce competition in the segment leading to lower tariffs and better service quality.

Trai’s decision is good news for service providers as CAC implementation would have forced them to spend around Rs 2,500 crore to upgrade their networks at a time when tariffs are low and average revenue per user is consistently declining. All service providers had opposed CAC.

However, infrastructure provider (IP-2) licence holders like PowerGrid, RailTel and Sify will be disappointed as CAC would have opened up additional channels of revenue. It would have allowed them to carry calls on their existing infrastructure with low-cost upgrades and also enabled them to enter the consumer market directly.

The exercise to introduce CAC was first carried out in 2001 when there were only two long-distance operators in the country and STD tariffs were around Rs 10 a minute. Since then, the number of long-distance operators has increased to 21 and STD tariffs are currently in the region of Rs 1.30 a minute.

Trai feels that with the operators interconnecting each other’s virtual calling cards, subscribers already have choice in long-distance operators and there are enough players to ensure competitive rates. However, analysts feel that the VCC route is more cumbersome than selecting a carrier by simply dialling an allocated code.