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Telecoms regulator hikes rentals for commercial phones

India's telecoms regulator has increased monthly rental charges from April for commercial telephone users, apparently aimed at helping fixed-line operators overcome the impact of a steep drop in long distance call tariffs.

National long distance tariffs have fallen by up to 62 per cent since January, dealing a severe blow to the finances of fixed-line operators which use higher long distance charges to subsidise cheaper local calls.

The Telecom Regulatory Authority of India on Thursday issued an order under which monthly rentals will be increased up to a maximum of Rs 310 from Rs 250 for both rural and urban commercial users.

The new rentals will not apply to non-commercial users, the TRAI said in a statement.

Phone companies have also been asking for an increase in local call tariffs, presently capped at Rs 1.20 for a three minute outgoing call.

The telecoms regulator said it had also decided to reduce the number of free calls for commercial users to 45 a month from 75 now in rural areas and to 30 calls a month from 60 in urban areas.

The move is likely to help incumbents Bharat Sanchar Nigam Ltd and Mahangar Telephone Nigam Ltd, which between them account for a bulk of the 34.5 million fixed-line telephone subscribers across India.

MTNL, which is the leading fixed-line operator in the two main cities of Mumbai and New Delhi, has around 4.3 million subscribers, while BSNL, which offers its services in the rest of the country, has around 30 million subscribers.

Private operators, notably Hughes Tele.com, Bharti Tele-Ventures and Tata Teleservices, operate smaller services in some Indian provinces.

MTNL's shares were up 3.19 per cent at Rs 153.60 and Bharti's shares were up 2.41 per cent at Rs 21.4 in late morning trade on the Mumbai exchange whose 30-share index was up 1.21 per cent.

The TRAI said the latest order was the third and last tranche of a major tariff rebalancing exercise started in 1999. The TRAI is working on another comprehensive tariff review, which it hopes to complete sometime this year, officials said.

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