April 17, 2005, Hindustan Times

A CONSUMER SOCIETY, CUTS, stated that the Telecom Regulatory Authority of India’s (TRAI) decision to offer access deficit services (ADS) only to basic telecom services to promote universal access was unfair.

The society submitted a consultation paper on Interconnection Usage Charge Review (IUCR) to the authority. Drawing a comparison that mobile services have witnessed a growth of 55 per cent as against eight per cent in the basic phone segment, the society said that the consumers were preferring mobile phones to fixed ones.

Therefore, the CUTS submitted that offering incentives and perks in the form of ADC was an unfair decision on the part of the authority.

It may be mentioned there that the TRAI had enunciated the concept of ADC to support fixed line operators at a time when the fixed subscribers far exceeded mobile ones.

At that time, the authority recognising the fact that basic telecom providers had historically run a cross-subsidised system in which relatively high long-distance tariffs raked in surpluses, which were used to offset the losses because various items were priced below cost, Vinayak Pandey of CUTS, said.

With competition eroding fat margins in the long-distance segment, the cross-subsidy system could not continue to work. So, the TRAI imposed ADC to offset the gap between tariffs and costs.

He said that the TRAI should focus on achieving the objectives of universal access and universal service by giving equal emphasis on all telecom services, rather than being obsessed with basic telecom service.

The question here was to make telecom services more affordable, be it fixed or mobile service.

Assuming basic services can improve accessibility in rural areas nullifies the potential of mobile services, he said.