RCOM & TATA TELE TO PAY TOTAL RS 700 CR AS ACCESS DEFICIT CHARGE AFTER SUPREMECOURT TAGS THEIR UNLIMITED CORDLESS AND WALKY SERVICES AS WIRELESS

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THE Supreme Court has assorted Reliance Communications’ (RCOM) Unlimited Cordless and Tata Teleservices’ (TTSL) Walky services with the wireless category, maintaining that they were bound to pay an access deficit charge (ADC) of Rs 700 crore to BSNL. RCOM’s share will be about Rs 400 crore and TTSL’s Rs 300 crore.

A SC Bench, headed by Justice HS Kapadia, dismissed the Tata Teleservices and RCOM petitions and upheld telecom tribunal TDSAT’s September 2005 order that held these services as limited mobile services rather than fixed-line telephones. TDSAT too had directed the two companies to pay the ADC levy. RCOM and TTSL had then challenged the tribunal’s decision in the SC.

Telecom regulator Trai, incidentally, had phased out ADC from April 1, 2008. Prior to that, all telcos shared a part of mobile revenues with BSNL as ADC levy, which was used to support the public sector unit’s unviable operations in rural India.

In its 2005 order, the telecom tribunal had justified its stance, saying services (such as Walky) were capable of operating outside one’s premises within the short distance calling area and, therefore, must be treated as a wireless in local loop mobile (WLL-M) phone and not as a fixed line.

In August 2005, the department of telecom (DoT) too had categorised fixed wireline services (FWT) services as mobile services on the ground that operators had not taken the requisite steps to confine these phones to the premises of the subscriber.

RCOM said the SC ruling would not result in additional burden as the liability was already accounted for. “The case pertains to 2002-03, prior to the corporate reorganisation of Reliance Communications and has been fully provided for in the previous fiscals. There is no additional liability on the company following the judgment,” an RCOM spokesperson said. A TTSL spokesperson said: “As the matter involves the honorable Supreme Court, we would not like to comment until we receive the copy of the order and study it at length.”

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