One India, one query

Telecom is wonderful proof that liberalisation, warts and all, always benefits consumers. The BSNL/MTNL One India tariff plan 8212; pay somewhat higher rentals for the option of an uniform, distance-neutral and low STD rates 8212; isn8217;t without its share of controversy. But consumers stand to benefit. Private players have tried to preempt BSNL/MTNL by offering single STD rates. There8217;ll be churning, migration of consumers, and perhaps more attractive, follow-up schemes. Whatever happens, tariffs won8217;t be going up and choices won8217;t be shrinking. Dayanidhi Maran, criticised for forcing through too ambitious a plan, deserves credit for anticipating a trend 8212; 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 doesn8217;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, today8217;s competitive market demands a reunion. What better indicator of that than the One India plan 8212; the two state companies cannot serve One India together. MTNL doesn8217;t have BSNL8217;s reach. BSNL doesn8217;t have MTNL8217;s high value metropolitan markets. A BSNL-MTNL marriage should receive political blessings as well 8212; since the bigger entity can take on private players better.

One India tariff plans should kill the other major telecom oddity 8212; access deficit charges ADC 8212; 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.