Call rerouting tangle is tip of iceberg

It’s the tip of the iceberg. The Delhi High Court’s order against Reliance Infocomm for depriving state-owned BSNL of Rs 254 crore...

It’s the tip of the iceberg. The Delhi High Court’s order against Reliance Infocomm for depriving state-owned BSNL of Rs 254 crore by passing off international calls from the US as domestic ones has brought the grey market into the spotlight.

According to government estimates, the real magnitude of rerouting of calls is around Rs 1,800 crore as over one billion call minutes are from the ‘‘grey market’’. And this entire grey market operation eats into BSNL’s profitability. This is how it works. Every incoming call for any domestic telecom company that uses BSNL to connect calls to its customers is liable to pay the BSNL what is called the Access Deficit Charge (ADC). For domestic calls, this ADC is charged between Rs 0.30 to Rs 0.80 per-minute. For calls from the US, the charge is Rs 4.25.

In other words, firms bringing international calls have to pay Rs 4.25 to BSNL for a one-minute call. However, if this call is showed as a domestic call, firms earn an extra Rs 3 per call minute. The BSNL has now estimated losses on account of Reliance Infocomm alone at Rs 254 crore. Authorities are finding out which other companies are causing such losses. Before the ILD sector was opened up, VSNL was the only company licensed to bring in international calls. Now with private parties being allowed, it has become difficult to monitor these calls. It is this price band that is the root cause of this problem, thanks to rates fixed by the TRAI. It is the illegal delivery of calls to subscribers has given birth to this grey markets.

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According to internal documents of the DoT, the presence of a grey market operation is clearly stated. Even the TRAI has not only recorded the existence of a grey market in its Consultation Paper of May 15, 2003, its IUC Regulation of October 29, 2003 and its ADC Consultation Paper of June 23, 2004, has also specifically recorded the complaints of service providers in this regard.

Despite the BSNL, DoT and TRAI acknowledging the problem and the massive loss of revenue, there is no plan to stop these losses. While experts have pointed out the arbitrage opportunity in ADC as the major cause of the revenue leak, the TRAI has ducked the issue so far. TRAI has also missed the deadline of October 1 to address the ADC issue.

No revenue loss to govt: Ambani

		New Delhi: Reliance Infocomm on Saturday stated that there was no loss of revenue either to the government or to the public-sector BSNL due to the alleged routing of international calls as local calls. “The matter is sub-judice but the overall view I can share is that our home country direct service was very transparent, and voluntarily there is no loss of revenue to the government or the payment that we have made, there is no loss of revenue to BSNL,” Reliance Industries chairman Mukesh Ambani said. —PTI

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