DoT estimates revenue loss at Rs. 3,000 cr.

NEW DELHI, JAN. 26. The Department of Telecommunications (DoT) has estimated a revenue loss of up to Rs. 3,000 crores during the current financial year due to implementation of cost-based tariff for telecom services announced by the Telecom Regulatory Authority of India (TRAI) in May last.

The DoT has retained old tariff for low users but implemented new tariffs only for the high-end users. However, the concept of raising local charges and reducing long distance call charges did not result in increase in usage, sources said.

Though the trend of declining revenues was observed across the country, some of the circles witness very sharp decline resulting in a loss of more than Rs. 2,900 crores in 1999-2000.

This was likely to affect the growth of the telecom sector in a significant manner, sources said adding that the revenue loss of this amount in just one year could upset some of targets in the coming year.

The department, with an annual turnover of more than Rs. 20,000 crores, was ploughing back its resources into the sector to achieve higher growth which was clear from the spread of Indian telecom services throughout the country.

Telecom is one of the infrastructure sectors which grew satisfactorily, only because the department was able to collect money efficiently for its services, sources added.

Since the usage of long distance telephony was more from well-off consumers, reduction of tariff could not make any significant difference in the usage, while the low-end users were hit hard by increase in local charges.

Asked whether the department would approach the new TRAI, to be reconstituted soon, for reviewing the old tariff order, sources said some communication had already gone to the old regulator.

The Government has set some ambitious targets including provision of telephone connection in every village by March 2002, and the targeted teledensity of five by 2005 could be adversely affected if loss in revenue continued.

The department had targeted to provide telephone in 45,000 villages during the current financial year, of which 10,000 villages were connected by December 1999, sources said.

- PTI

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