Local and domestic long distance mobile call tariffs may drop further, thanks to telecom regulator Trai's announcement to do away with a fee that private telecom operators pay to state-run BSNL.

After Trai announced on Thursday that private players would be exempted from paying the fee by April 1, Cellular Operators Association of India director general T V Ramachandran said: "The industry is going to pass on the benefit to customers, but it will be to the extent of relief it gets."

Private operators were hitherto paying the fee called Access Deficit Charge to BSNL at the rate of 0.75 per cent of their Adjusted Gross Revenue or about Rs 600 crore (Rs 6 billion) a year.

"We will be passing on the benefit to our customers wherever possible," a spokesperson of leading CDMA operator Tata Teleservices [Get Quote] said.

GSM player Bharti Airtel [Get Quote] also welcomed the move saying, "We are committed to passing on the benefits of ADC relief to the customers primarily in the rural areas as desired by Trai."

Another major player Vodafone Essar also welcomed the move and said that it too would pass on the benefit to customers in an equitable manner and announce it shortly.

Access Deficit Charge (ADC) was paid by private telecom service providers to compensate BSNL for offering services in rural areas at subsidised rates.

However, BSNL which has been advocating for continuation of this levy got some respite, as TRAI has decided to recommend to the government to provide Rs 2,000 crore (Rs 20 billion) annually for a period of 3 years to compensate the loss of ADC revenue.

BSNL was getting Rs 5,000 crore (Rs 50 billion) annually through ADC till about two years ago from private players.