In its latest revised estimates submitted to TRAI, DoT has also stated that even if there is no increase in domestic long distance and international calls (STD/ISD) traffic in 1999-2000, the department's revenue will go up by Rs 151.88 crore.

However, DoT has claimed that its revenue would fall by Rs 940 crore in 2000-2001 if there is no increase in traffic but would rake in additional Rs 94.31 crore if the traffic is up by 10 per cent.

During 2001-2002, the revenue impact would be a massive loss of Rs 2,441 crore provided there is no increase in traffic and a loss of Rs 1,378 crore if the traffic increases 10 per cent. But in case of traffic rising by 25 per cent, DoT's revenues would be higher by Rs 194.12 crore.

Interestingly, while TRAI hasmaintained that reduction in STD and ISD call charges will increase traffic and thereby have no negative impact on DoT revenues, the department does not seem to share this optimism.

DoT had told the standing committee of the communications ministry that following an average 50 per cent reduction in STD and ISD call charges, the demand must rise by 100 per cent.

However, TRAI has countered this by arguing that when certain other prices, such as rentals, are also increased, then a decline of 50 per cent in STD and ISD charges does not require an increase of 100 per cent in traffic volume.

TRAI has said that there are several other factors which will result in increase in traffic and subsequently in revenues.

The proposed tariff structure will form substantial portion of call-back calls being made from India itself. A study showed that call-back in India was over 100 million minutes in 1997. Considering the DoT projections, this would amount to an additional revenue of Rs 500 crore in 2001-2002.Anotherfactor cited by TRAI is the substantial increase expected in internet usage by 2001-2002 which will mean a rise in the share of local calls in total calls, including calls which are likely to last more than three minutes. If these calls were to be only two per cent of the total calls in 2001-2002, the additional revenue accretion to DoT would be about Rs 300 crore.

According to TRAI, a major point that has been missed in DoT estimates is that the re-balancing of tariffs would result in DoT losing a lower revenue to its competitors when they lure away those subscribers that account for a large portion of the calls. With a one per cent subscriber shift in 2001-2002, TRAI re-balanced tariffs would imply a saving of revenues ranging from Rs 650 crore to Rs 800 crore for a shift from the highest caller category (those making above 10,000 calls bi-monthly). In case of a shift from the second-highest caller category (those making above 5,000 and up to 10,000 calls bi-monthly), it would lead to revenue savings ofRs 100 crore to Rs 175 crore.

DoT revenue would also go up due to the August 1998 order which extended the coverage of local call area. The order would imply a higher share of local calls in total calls, according to TRAI.