The Hindu : BSNL lowers STD tariff

Online edition of India's National Newspaper
Wednesday, Dec 10, 2003

National

National

BSNL lowers STD tariff

By Our Special Correspondent

NEW DELHI DEC. 9. The Bharat Sanchar Nigam Limited (BSNL) today announced a 25 per cent reduction in the tariff for fixed-to-fixed STD calls within a telecom circle which roughly corresponds to state boundaries in most cases. A higher concession is available for subscribers to its super plan (monthly rental of Rs. 1,650 with 1,800 free calls). Most STD calls, worth Rs. 5,000 crores annually, fall in this category.

The BSNL Chairman and Managing Director, Prithipal Singh, made the announcement at a press conference to announce the company's annual results for the previous fiscal. Profits are down by 77 per cent from Rs. 6,412 crores to Rs. 1,444 crores but the turnover increased by five per cent to Rs. 25,892 crores, the largest among all public sector companies except the oil companies.

The rate for intra-circle STD calls will now be Rs. 1.80 a minute with a pulse of 40 seconds. Super plan subscribers need to pay Rs. 1.20 a minute. The charges are valid for a distance of over 100 km as BSNL charges local call rates for calls within a 100 km radius. "We want customers to call more so that fixed phone becomes an essential item in shops and homes,'' said Mr. Singh.

Mr. Singh said the delay in implementing the inter-company phone settlement rates had delayed BSNL's plans to restructure the tariff. But customers should expect more value-added services in future rather than discounts in calling charges. BSNL has taken initiatives in this regard. For instance, it has announced a second fixed phone exclusively for surfing the Internet at a flat rate of Rs. 399 for small exchanges and Rs. 499 for exchanges of over one lakh line capacity. Installation charges have been waived for the second connection. Senior officers said customers should expect more incentives of this kind because tariffs are fast reaching rock bottom.

Mr. Singh denied these schemes have been devised to offset the surrender of phones. The figure for the first 10 months of the current fiscal is 17 lakhs for BSNL and over two lakhs for MTNL.

"Churning happens when there are several options. When the market gets going this kind of thing happens. According to research, most of the customers who have surrendered the phones have opted for BSNL's mobile or limited mobility services.''

Dwelling on the results approved by the company's annual general meeting, Mr. Singh said despite the massive cuts in tariff rates, usage had gone up leading to higher turnover. He attributed the sharp cutback in profits to higher staff costs and wages (from Rs. 6,300 crores compared to Rs. 3,900 crores in the previous fiscal).

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