Bharat Sanchar Nigam Ltd has accused the Tata-controlled Videsh Sanchar Nigam Ltd of overcharging it by around Rs 850 crore (Rs 8.50 billion) in the last two years for carrying international long-distance calls.

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Senior BSNL sources pointed out that VSNL on Monday quoted a settlement rate of Rs 2.2 per minute for the United States, United Kingdom and Canada sectors.

Considering that VSNL had been charging Rs 6 per minute since 2002, BSNL suffered an annual loss of around Rs 182 crore (Rs 1.82 billion) on this sector alone. The monthly traffic to the US, UK and Canada sector was around 40,000,000 minutes per month, BSNL executives said.

"The overall loss suffered by BSNL across all the sectors would be around Rs 850 crore if one compared VSNL's old rates with the new ones," an executive said.

VSNL executives, however, said that it was unfair to compare the old rates with the new because international settlement rates had fallen significantly over the last two years, enabling the company to offer lower rates now.

They also pointed out that BSNL, which earlier charged nearly Rs 24 a minute for domestic long-distance calls, had dropped prices to Rs 4 now because of competition.

"Competition in the international long-distance segment has brought down rates. Besides, international carriers are now ready to offer low rates owing to a glut in the bandwidth market," a VSNL source said.

He said the company would offer BSNL even lower rates in the next couple of days in response to Data Access's bid of Rs 1.69 per minute to the US and UK.

According to sources in VSNL, the overcharging should not be more than Rs 250 crore (Rs 2.50 billion) per year because tariffs have already been lowered in some sectors.

Meanwhile, BSNL chairman V P Sinha said the company would soon start negotiations with VSNL to match the rates offered by Data Access.

"We will negotiate the rates with VSNL for carrying international calls originating from our network. If it comes down to the same level as other operators, we will route traffic through it," Sinha said.

He added that in case BSNL managed to get lower rates from VSNL or others, the benefits would be passed on to its subscribers.