DoT seeks Rs 3000 cr support for BSNL- Telecom-News By Industry-News-The Economic Times

17 Jun 2009, 0302 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: The communications ministry has sought an allotment of Rs 3,000 crore from the finance ministry for supporting BSNL’s wireline networks that were set up before April 2002. The DoT wants the amount to be sanctioned in the budget.

This is to compensate the state-owned telco for losses during the last fiscal after telecom regulator Trai had done away with access deficit charge regime from April 1, 2008. Prior to that, all telcos were paying 0.75% of total revenues towards ADC, which was used to support BSNL’s unviable fixedline operations in rural India. In 2007-08, BSNL got Rs 2,000 crore as ADC.

But, when hanging up on ADC, the regulator in a bid to address the concerns of BSNL , which had warned that it would be forced to discontinue all its rural fixed-line operations if the levy were to go, recommended that the government give it a subsidy of Rs 2,000 crore per annum for the next three years from the Universal Obligation Fund (USOF).

All telcos pay 5% of total revenues towards the USOF, which is dedicated to improving communication facilities in rural India. Unutilised amount in the USOF is at over Rs 20,000 crore. In March 2009, BSNL and DoT had signed an MoU to provide the state-owned operator a subsidy of Rs 6,000 core over the next three years from this fund to sustain its rural operations.

In fact, BSNL had even dragged the regulator to the telecom tribunal, but the latter refused to issue a stay on the matter. Trai had however, justified its move to do away with the ADC regime on the grounds that the total support provided to BSNL over the last couple of years under various initiatives which includes reimbursement of licence fee and spectrum charges, moratorium on payment of interest, support from Universal Service Obligation Fund(USOF), ADC funding and exemption on entry fee was about $8 billion (Rs 31,500 crore), while adding that the PSU cannot be supported in perpetuity.

In a bid to give further relief to BSNL, last year, DoT also exempted telcos from paying licence fee on fixedline telephony from licence fee enabling the state-owned operator to save Rs 1,200 crore annually.

via DoT seeks Rs 3000 cr support for BSNL- Telecom-News By Industry-News-The Economic Times.

TDSAT dismisses BSNL’s petition on ADC

Press Trust Of India / New Delhi May 13, 2009, 0:09 IST

Telecom Disputes Settlement & Appellate Tribunal (TDSAT) today rejected a bunch of petitions by state-run Bharat Sanchar Nigam Ltd. (BSNL) challenging removal of access deficit charge (ADC), a levy paid by private telecom operators for funding the PSU’s rural and remote operations.

Dismissing all the three petitions, a TDSAT bench, headed by Justice Arun Kumar, said, BSNL has no legal right to claim ADC from the private telecom operators and Telecom Regulatory Authority of India (Trai) has rightly terminated it.

“We hold that BSNL has no legal right to ADC. ADC has rightly been designed as a depleting regime …Rightly terminated in the year 2008-09 and the manner of calculating ADC each year was fair and reasonable, given the facts available with Trai,” said the TDSAT.

Trai abolished ADC in 2008-09. In the two fiscals previous to that, the ADC was reduced. In 2007-08, the regulator had reduced ADC by 37 per cent to Rs 2,000 crore from Rs 3,200 crore. BSNL challenged Trai’s decision in the sectoral tribunal. The tribunal also rejected BSNL’s contention that Trai was wrong while calculating ADC and relied on faulty data’s. It further said BSNL did not have any reliable data over the quantum of loss suffered by it for its rural obligations.

“Even the government itself stated in Parliament (in 2003) that BSNL does not have required data to calculate ADC due to it or being adjusted by it,” TDSAT said.