Thursday, June 24

Trai Releases Consultation Paper On Access Deficit Review

TRAI Releases Consultation Paper on Review of Access Deficit Charges :
TRAI had notified an Interconnection Usage Charge (IUC) and an Access Deficit Charge (ADC) regime in January, 2003 which was subsequently reviewed and a revised scheme for IUC and ADC was notified on 29th October, 2003. The Authority had stated in its subsequent notification, inter alia, that it would be reviewing the ADC regime annually, it would consider phasing out ADC funding to BSOs other than BSNL after next review, and consider moving to a revenue share regime to fund the ADC, which should gradually decline and be phased out within three to five years. The Authority has released a Consultation Paper today to begin the consultation process for such a review.

The paper first recalls some of the key points that the Authority had made in its notification of 29th October, 2003 regarding the evolution of the ADC regime over time, and its review for adopting a revised regime based on revenue share. The paper then notes a number of difficulties that have been reported regarding reconciliation of data (and hence related payments) as well as certain incentives for call bypass/grey market calls under the present ADC regime. The Authority has reached a conclusion that these matters would be suitably addressed under a regime based on revenue share. In this context, the Authority has also raised the issue of the ADC being made available only to BSNL, the incumbent which has a large presence in the country, including in rural and remote areas.

The paper argues that if the ADC regime is based on revenue share, then the extent of data requirement for the review is much lower than that required for an ADC regime based on varying charges per minute. Thus, based on reasonable assumptions on growth of subscriber base for fixed and mobile, capital investment and average revenues per user (including revenues from access and long distance services), it would be possible to calculate the required percentage revenue share that would fund the ADC. The paper has taken a range for the average monthly rental for BSNL’s fixed service, and thus has reached a range for the proposed ADC revenue share. One estimate of monthly rental is Rs. 156, which was the amount, based on actual data for 2002-2003, considered for the IUC Regulation of 29th October 2003. Subsequent to this some revisions in the monthly rentals have taken place in a number of tariff schemes, as a result of which the average monthly rental would have increased. An upper limit of Rs. 200 has been taken for monthly rental, in the paper on ADC review. This amount was used in the first IUC Regulation which was notified on 24th January, 2003, based on the standard tariff packages in place. Further, the Authority has now given tariff forbearance (except for rural areas). Thus, the range for monthly rental considered for the ADC review is Rs. 156 to Rs. 200.

The range for the proposed ADC revenue share based on the calculations mentioned in the paper is 2.2% (for monthly rental of Rs. 200) and 5.3% (for monthly rental of Rs. 156) of AGR(Adjusted Gross Revenue).

The Authority invites responses from the stakeholders by 15th July, 2004. For more detail, please see the TRAI website at “”.

Links :

* Consultation Paper On Access Deficit Review [HTML]
[PDF] Right Click and choose "Save As".