The telecom licence fee cut is a good move but the access deficit charge paid to BSNL may hinder benefits percolating to consumers
NEW DELHI: The licence fee cut for national and international long-distance players is a good move, said Bharti chairman and managing director Sunil Bharti Mittal. But even as he said that the licence fee cut would be passed on to consumers, he pointed out that access deficit charge (ADC) paid to Bharat Sanchar Nigam Ltd (BSNL) would come in the way of full benefits percolating to them.
ADC is paid by every private operator for long distance calls (STD and ISD) to BSNL to support its rural telephony initiatives. Mittal was speaking at a press conference here on Tuesday during the Hindustan Times Leadership Summit.
According to Mittal, BSNL can dilute its stake to support its social programmes. He valued BSNL at around $30 billion.
The sale of 49% equity in BSNL would thus yield $15 billion, which can be used for various initiatives, Mittal said. BSNL, which is 100% government-owned, made a profit of Rs 10,000 crore during 2004-05.
“The government should divest over a period of time in most businesses and telecom is certainly one of those”, he said. The UPA government is not moving forward on disinvestment, Mittal said. However, as per the common minimum programme of the government, no profit-making PSU will be diluted.
Even as the telecom industry has been saying that a profitable organisation like BSNL should not get subsidies, communications minister Dayanidhi Maran recently dismissed the argument.
Maran said the USO Fund is for the entire industry, not for BSNL alone, to go to unprofitable areas of operation mainly in rural towns. In addition to the USO Fund, of which BSNL is the 80 per cent beneficiary, the PSU also gets access deficit charge (ADC) worth Rs 5,000 crore per annum. The USO Fund allocation for 2005-06 is Rs 1,200 crore.
On the issue of seeking compensation for entry fee reduction in NLD and ILD services, Mittal backtracked. He said it was a mistake to send a letter to DoT along with others to claim compensation worth Rs 2,800 crore from the government.
On the sidelines, Mittal is also understood to have indicated that the company has overseas plans, without elaborating on the same. In May last year, Mittal had pointed out that consolidation in the cellular industry within the country would be completed shortly.
After that, Bharti would like to buy telecom firms in other markets like East Asia, West Asia, and Africa, Mittal had said at that point.
He had added that companies based in the US and Europe would be out of reach for Indian firms. More recently, following the Vodafone deal, Mittal had said that the money would be invested in “newer opportunities”.
Last month, in the largest single foreign fund inflow into India, Vodafone invested $1.5 billion (Rs 6,700 crore) to acquire around 10 per cent in Bharti Tele-Ventures Ltd (including the 5.65 per cent held by private equity firm Warburg Pincus and 4.4 per cent of Bharti Enterprises).
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