ADC regulations are expected to be modified so that long distance calls will be cheaper. The ADC levy is paid by operators to fund the subsidy on rural landlines. Private telecom service providers pay around Rs 5,300 crore annually to Bharat Sanchar Nigam Ltd (BSNL) as ADC. In return, BSNL operates 99% of rural fixed-lines.

At present, the ADC levy is calculated on every call, but the DoT, TRAI and telecom companies have now decided to change the ADC to a new revenue-sharing system. While revenue sharing will maintain payments to BSNL at current levels, it is expected to reduce the burden on private firms. The revenue-share amount is expected to be set in the range of 3-5% of revenue.

The ADC review also restores the mandate of the Telecom Regulatory Authority of India (Trai). In 2005, Trai was stopped from reviewing the ADC by DoT. Trai is committed to phasing out the ADC over time, but BSNL opposes this plan.

The government is now hoping to merge the Universal Service Obligation (USO) and ADC levies into a hybrid regime that will fund all subsidies for phones in rural areas. Private telecom operators are also eager to have a level playing field in collecting and disbursing the ADC levy. As a result, ISPs, internet telephony service providers and international long-distance operators may soon find themselves included in the ADC system.

Source: Indian Express - WDR/Intelecon Regulatory News