ITR cut: Telcos face Rs 20-bn loss but Trai says move to kill grey market

Although Trai's decision to cut international termination rate (ITR) to 30 paise per minute from 53 paise/min would result in loss of about Rs 20 bn in revenues of telecom firms but the regulator feels it was necessary to keep a check on the grey market, which poses a serious security threat to the country.

The Telecom Regulatory Authority of India (Trai) has announced a cut in the ITR 30 paisa/min from 53 paise /min, effective February 1, 2018. ITR is what Indian operators receive for termination of international incoming calls on their networks.

As per the regulator, citing industry estimates, about 20 per cent of international long distance (ILD) calls terminate in India through grey route. Also, Trai said the carrier route for carrying international incoming voice traffic is facing a fierce competition from over-the-top (OTT) players like WhatsApp, Skype, Facetime etc. As calls from OTT players travel on the internet, termination charges are not paid.

In fact, Trai said carrier route has begun to decline from FY17, which suggest that any increase in ITR is likely to result in a sharper decline of international incoming voice traffic on a carrier route. "The menace of grey route poses a serious security threat to the country apart from causing significant leakage in the revenue accruable to the country and its telecom service providers," Trai said. 

The telecom regulator further said that players involved in grey market thrive on the significant arbitrage opportunity available as domestic termination rates are 6 paise per minute and they route international calls as domestic calls.