X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Telecom regulations: The month that was - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Apr 20, 2007

    Telecom regulations: The month that was

    In this series of articles, we shall be coming out with regular updates on the important happenings in the telecom sector that have transpired at the regulatory level. In this series, we shall enumerate the important regulations/announcements and gauge how they will change the scape of the telecom sector in India.

    Responses to consultation paper on Access Deficit Charge (ADC)
    The main issues raised in the consultation paper released in January 2007 were:

    1. Should the regulatory authority continue with the present reduction trend in ADC?

    2. What should be the appropriate option for the collection of ADC?

    To this the regulator had received responses from AUSPI, COAI and various telecom service providers asking it to continue with the reduction in ADC as planned stating the following reasons:

    USO and ADC meet similar objectives and it is undesirable to have two different mechanisms in force to meet the same policy objectives.

    • Liberalization of the telecom sector has witnessed intense competition leading to an unprecedented growth of subscribers and reduction in tariff to levels, which are the lowest in the world. Having an ADC in such a competitive environment would mean that the private players are funding the operations of the incumbent.

    • Subsidies promote unfair competition and anti-competitive use of subsidies.

    • ADC inflates the price of subsidising services and reduces the demand for them.

    As regards the appropriate option for collection of ADC it was proposed that the burden on domestic subscribers be removed and ADC be collected from ILD incoming calls only.

    Idea Cellular Ltd. submitted compliance report on refund to cellular subscribers
    The company had charged differential call charges (in Delhi service area) with respect to calls that terminated on the BSNL/MTNL networks vis-a-vis private GSM networks. The regulator had asked disallowed the charging of such discriminatory charges and had asked the company to refund to its subscribers such excess charges as had been collected from them. This resulted in 192,000 customers getting refunds of an amount totaling to Rs 13.6 lakhs.

    TRAI lowered the Access Deficit Charge (ADC)
    The regulator announced the lowering of the ADC applicable as follows:

    • ADC for 2007-08 reduced to Rs 20 bn from their previous levels of Rs 32 bn.

    • Complete removal of ADC burden from domestic consumers on outgoing international long distance calls (ILDC).

    • Per minute ADC on incoming ILDC reduced to Re 1 per minute from their earlier levels of Rs 1.6 per minute.

    • ADC on percentage revenue share basis halved to 0.75% of AGR (Adjusted Gross Revenues) of all service providers.

    The move had been made in anticipation of:

    • Lowering of telecom tariffs

    • Greater usage of services as a result of affordable or lower tariffs.

    • Sustained growth of telecom services

    • Reduce arbitrage in international calls hence leave very less scope for ILD grey markets.

    Recommendations to Department of Telecommunication on terms and conditions for resale in International Private Leased Circuits (IPLC)
    'Resale' is the sale or lease of telecom services to an end consumer on retail basis after leasing from telecom service provider on a commercial basis at wholesale prices. Incase of resale of IPLC, resellers are required to take IPLC from International Long Distance Operators (ILDOs) and sell to end consumers such as software exporters, BPO units, Call centers, Banks and other small and medium enterprises (SMEs) that require to transmit a large quantum of data.

    Allowing of resale of IPLC is likely to result in the following:

    • Provide an effective entry vehicle for new entrants that may result in the reduction in prices in the IPLC segment.

    • Improve customer service to end customers and business entities.

    • Stimulate the usage of existing network through innovative means benefiting the facility-based provider as also the end consumers.

    • Induce innovative services in terms of new billing terms and innovative tariff packages.

     

     

    Equitymaster requests your view! Post a comment on "Telecom regulations: The month that was". Click here!

      
     

    More Views on News

    Bharti Airtel: A Good Quarterly Performance (Quarterly Results Update - Detailed)

    May 6, 2016

    Bharti Airtel has reported a8.4% YoY growth in the topline and an increase of 2.8% YoY in the bottomline for the quarter ended March 2016.

    Bharti Infratel: Ends the Year Positively (Quarterly Results Update - Detailed)

    Apr 27, 2016

    Bharti Infratel has reported a 7.3% YoY growth in the topline and an increase of 18.7% YoY in the bottomline for the quarter ended March 2016.

    Bharti Infratel: A Good Quarter (Quarterly Results Update - Detailed)

    Apr 8, 2016

    Bharti Infratel has reported a 4.9% YoY growth in the topline and an increase of 11.5% YoY in the bottomline for the quarter ended December 2015.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE TECK


    Aug 18, 2017 (Close)

    COMPARE COMPANY

    MARKET STATS