Regulators says India to abolish levy on phone firms

India's telecoms regulator would phase out levies paid by telecoms firms to state-run telecom BSNL, raising hopes that tariffs could fall further and triggering a rally in sector stocks, a Reuters report said.

India has recently awarded more than 100 new telecom licences to a number of new and existing firms, the Reuters report added.

Telecom firms pay 0.75 % of their revenue to BSNL and international long distance service providers pay 1 rupee ($0.025) per minute on incoming calls. The levies, known as the access deficit charge (ADC), were introduced in 2003 to help the former monopoly operate in a competitive environment.

The Telecom Regulatory Authority of India (Trai) said it would abolish the ADC as a percentage of revenue share from April 1 and halve the charge on international calls before abolishing it in October, the Reuters report said.

Bharti Airtel welcomed the regulator's move and said it would pass on the benefits of ADC sunset to its customers, the report added.

The Reuters report further said BSNL would make an announcement on the details within a week, after consulting the Trai.