DoT projects Rs 3,000 crore loss

BANGALORE: The Department of Telecommunication (DoT) has estimated a revenue

loss of up to Rs 3,000 crore during the current financial year due to the

implementation of cost-based tariff for telecom services announced in May last

year by the Telecom Regulatory Authority of India (TRAI).

DoT has retained old tariff for low users and implemented new tariffs for the

high-end users. However, the concept of raising local charges and reducing long

distance call charges did not result in increase in usage, sources said. Though

the trend of declining revenues was observed across the country, some of the

circles witness very sharp decline resulting in a loss of more than Rs 2,900

crore in 1999-2000. This was likely to affect the growth of telecom sector in a

significant manner, sources said adding that revenue loss of this amount in one

year could affect some targets in the coming year.

The department, with an annual turnover of more than Rs 20,000 crore, was

reinvesting into the sector to achieve higher growth. Since the usage of long

distance telephony was more from well-off consumers, reduction of tariff could

not make any significant difference in the usage, while the low-end users were

hit by increase in local charges. If the revenue loss continues, the targeted

teledensity of five by 2005 could be affected. The department had targeted to

provide telephone in 45,000 villages during the current financial year, of which

10,000 village were connected by December 1999, sources said.