Had this reduction not been deferred, STD and ISD call charges would havebeen further cut by 20-25 per cent for 2000-2001.

TRAI members, led by chairman MS Verma, have now decided that the currenttariffs, pulse rates, and call charges will continue to be the same tillJuly 31, 2000.

TRAI will now undertake a comprehensive review of the entire tariffre-balancing exercise that it initiated in 1999. This is expected to takefour months.

The review will be conducted on the basis of the revenues and call trafficdata for 1999-2000 from all basic telecom operators, including MahanagarTelephone Nigam Ltd (MTNL), DTS, and private companies, like Bharti Telenetand Hughes Ispat.

TRAI's decision follows the Department of Telecom Services' (DTS)representations for a review of the second phase of cut in telecom tariffs,including the crucial long-distance charges.

DTS has said that the first-phase reductions ending April 1, 2000, haveresulted in a massive loss of Rs 2,200 crore and would impact its capabilityto finance expansion programmes.

TRAI had initiated the process of slashing telecom tariffs in early 1999.After public consultations, the authority had decided to implement the risein telephone rentals and the cut in STD/ISD call charges over threephases.

The first phase commenced on April 1, 1999, and was to be followed by thesecond phase from April 1, 2000. The authority, in its Telecom Tariff Order,1999, had effected a major change in the telecom tariffs. These included anincrease in the monthly rentals, reduction in call duration from fiveminutes to three minutes, a drastic cut in the number of free calls, and a15-20 per cent slash in domestic and international long-distance call rates.During the consultation process, the Department of Telecommunications (DoT)had informed TRAI that a major fall in revenues would occur due to the newtariff regime. Consumers felt that there should be a decrease in DoT'srevenues, because it had a high surplus, and some of it should be passed onto the subscribers. DoT had rejected this, and said that it had no surplus,because all its funds are re-invested to extend the network.

TRAI, at that stage, had said that DoT must distinguish between a surplusand its use. The authority had contended that DoT would be able to play amajor role in the development of India's telecom network without resortingto excessive market borrowing.