BSNL seeks ISD termination rates review

2 Jan 2009, 0230 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: BSNL has asked the government to allow Indian telcos to charge foreign operators up to ten times the current rates for terminating
international incoming calls. Saying that this would not impact domestic consumers, BSNL has justified its demand by highlighting that foreign operators, on an average, charge Indian telcos about Rs 3 per minute to terminate outgoing ISD calls in their countries.

But existing regulations do not allow Indian telcos to charge foreign operators more than 30 paise per minute for bringing their calls here. BSNL has also pointed out that the current regulations ‘deprived the country of valuable foreign exchange to the tune of Rs 4,000-5,000 crore per annum’.

For example, if an AT&T user in the US or a Telecom Italia customer in Europe were to make a call to a Bharti customer here, Airtel cannot charge AT&T or Telecom Italia more than 30 paise per minute for terminating their call in India. On the other hand, foreign operators charge Indian telcos an average of about Rs 3/minute to terminate ISD calls on their networks.

“The present regulatory regime in India has resulted in drastic reduction in revenue from incoming international calls whereas there is a significant increase in the outflow of revenue to other countries, as foreign telecom operators have not reduced their termination charges because of the favourable and protective regulatory regime in those countries.

This has not only adversely affected the financial viability of telecom service providers in India but has also deprived the country of the valuable foreign exchange to the tune of Rs 4,000-5,000 crore per annum,” BSNL has said in its communication to Trai.

BSNL has also demanded that termination charges be reviewed immediately to compensate all operators for the actual costs being incurred by them and also to have parity with their foreign counterparts. It’s important that the ‘interests of the country at large and that of the Indian telecom sector in particular be protected’.

It is not known if Trai, which is examining the issue, will agree with BSNL’s proposal. Further, BSNL has also added that the increased revenue from international incoming calls on account of hiking the termination charge for foreign operators could be used to subsidise local and STD calls within the country.

Until August 2008, BSNL used to receive 50 paise per minute as Access Deficit Charge (ADC) on all international incoming calls to India. BSNL used the ADC proceeds to fund its unviable rural fixedline services which are offered at heavily subsidised rates. But Trai had done away with the ADC levy from September 2008 and said that the government must compensate BSNL for its rural landline operations from the Universal Service Obligation Fund (USOF).

All telcos pay 5% of their total revenue to the USOF and so far, the unutilised amount in this fund has crossed Rs 20,000 crore. BSNL has further added that since Trai had done away with the ADC levy, it should permit Indian operators to demand higher termination charges from foreign telcos.