ABTO seeks to stall rate cuts

Neeraja Kumar in New Delhi

Private basic telecom operators have asked the regulator to stall rate cuts in long distance calls — announced by Bharat Sanchar Nigam Limited (BSNL) and mobile operators — till the tariff re-balancing exercise is completed. On December 31, Association of Basic Telecom Operators (ABTO) made a representation in this context to the Telecom Regulatory Authority of India (Trai).

The re-balancing is supposed to be completed by April 2002 as per the current schedule. However, according to sources, after the current spate of NLD rate cuts, Trai has decided to rush the tariff re-balancing exercise and is planning to come out with a consultation paper on the issue in January itself.

Right now, basic service operators get to keep 60 per cent of the long distance revenue. For a Rs 24 per minute call, this translates to Rs 14 per minute. This is used to subsidize the low local call rates. With the new BSNL rates of Rs 9 per minute for a long distance call, the private operators will get to keep only Rs 5.40 per minute.

This is not enough to subsidize the “affordable” monthly rental and tariff they are supposed to charge for providing basic services. To prevent this, tariff re-balancing, which seeks to bring a parity between local and long distance call charges and monthly rental, is required.

“You cannot stop the prices from going down. But this might kill the basic telecom industry. After all, the role of regulator is to ensure that all segments can survive,” said a senior ABTO official.

However, they are not exploring the option of going to the Telecom Dispute Settlement Appellate Tribunal (TDSAT) right now. “We want to wait for Trai to resolve the issue,” he added.

Meanwhile, cellular operators are confident that basic operators cannot stop the STD rate cuts from happening. “This is too big a thing for them to stop,” according to Cellular Operators Association of India director general T V Ramachandran.

Bharti Group chairman and managing director Sunil Bharti Mittal is also confident that the government will not stall the rate cuts announced by mobile operators riding on Bharti’s national long distance network. Meanwhile, ABTO is demanding that “basic operators be given coverage from the Universal Service Obligation (USO) fund, so that they can adjust to the rate cuts, without ruining their business case.”

Basic operators also want that they should now be allowed complete mobility within circles, since the cellular operators are now being given access charges — which was earlier the prerogative of basic operators alone.