One India, one query

Telecom is wonderful proof that liberalisation, warts and all, always benefits consumers. The BSNL/MTNL One India tariff plan — pay somewhat higher rentals for the option of an uniform, distance-neutral and low STD rates — isn’t without its share of controversy. But consumers stand to benefit. Private players have tried to preempt BSNL/MTNL by offering single STD rates. There’ll be churning, migration of consumers, and perhaps more attractive, follow-up schemes. Whatever happens, tariffs won’t be going up and choices won’t be shrinking. Dayanidhi Maran, criticised for forcing through too ambitious a plan, deserves credit for anticipating a trend — telephony once carried via an internet architecture will mean the death of distance as far as tariffs go. The earlier service providers get used to non-graded tariffs, the better placed they will be for the soon-to-come technological change.

It is not clear, however, why Maran doesn’t see the oddity in BSNL and MTNL being separate entities. Whatever the logic behind carving out MTNL from the then monopolist state service provider, today’s competitive market demands a reunion. What better indicator of that than the One India plan — the two state companies cannot serve One India together. MTNL doesn’t have BSNL’s reach. BSNL doesn’t have MTNL’s high value metropolitan markets. A BSNL-MTNL marriage should receive political blessings as well — since the bigger entity can take on private players better.

One India tariff plans should kill the other major telecom oddity — access deficit charges (ADC) — quickly though. ADC is a tax on long distance callers to fund commercially unviable village phones. If all STD calls are charged at the same rate, the concept of a tax on distance becomes untenable. But the obligation to provide telephones to all should be there. The answer is the already existing universal service obligation (USO) fund. ADC should be subsumed under USO. If that sounds complicated, remember at the end it is all very simple: calling is becoming cheaper.