The ADC as it is levied at present is the difference between the cost incurred by BSNL to provide fixed line services and the amount charged from the subscribers. Since the rentals and the call charges are below cost, the ADC which is imposed on the private operators, is meant to compensate BSNL for keeping the service affordable and incurring this extra expenditure. This component is incorporated in the overall interconnection charges that the private operators have to pay BSNL for linking up with its network for local, STD and ISD calls made by their subscribers. As a result, any decline in this component will give the private operators that much more flexibility to reduce rates, while BSNL will suffer a corresponding decline in revenues.