New NLD Rates Not To Affect Revenues, Says BSNL

Mumbai: | Updated: Feb 28 2003, 05:30am hrs
State-owned Bharat Sanchar Nigam Ltd (BSNL) is unlikely to suffer lower revenues post the implementation of the new national long distance (NLD) rates.

The telecom giant has filed its rates with the Telecom Regulatory Authority of India (Trai) and is awaiting approval.

BSNLs chairman and managing director Prithipal Singh told eFE that the rates were filed last week. There will be no concern on revenues falling since volumes will definitely increase, he said.

It may be recalled that BSNL announced its first rate cut in January last year when it brought down peak time calling charge to a maximum of Rs 9 per minute. This was significantly lower than the Rs 24 that was earlier charged.

The first round of rate cuts were announced when Bharti Telesonic announced its rates for its IndiaOne long-distance service.

The present rate cut comes after Reliance Infocomm and Tata Teleservices have announced long distance tariffs at Rs 1.20 per three minutes (40 paise per minute).

Telecom analysts have said that it would be difficult for BSNL to increase volumes to compensate for this 63 per cent fall in rates.

It may be mentioned that a high traffic route like that between Delhi and Mumbai itself accounts for a large percentage of NLD revenue in India.

According to Mr Singh, there will be no loss of revenue. Since the rates were reduced last year, we have seen a visible increase in volumes, Mr Singh said.

The present rate cut will now result in a uniform reduced rate of Rs 4.80 through the day for a distance greater than 500 kilometres. For distances lesser than that, the existing rates will prevail.

The issue gains importance since a huge chunk of BSNLs revenues comes from NLD services where it was the monopoly.

With new players entering the fray, it is expected that there will be lower tariffs coupled with different rate structures.