Trai to review inter-connect usage charges

Telecom Regulatory Authority of India (Trai) has come out with a consultation paper to review the current regime of inter-connection usage charges (IUC), a move that might lower the telephone call rates if the charges are further reduced.

In February last year, Trai had removed charges that a landline service provider has to pay to other players for transmitting a phone call of its customers. Similarly, the regulator waived off fixed termination charges that are levied on calls made from a mobile phone to a landline number.

For wireless to wireless, the termination charges were reduced to 14 paisa per minute from 20 paisa earlier.

A telecom operator is required to pay inter-connection charges when its subscriber makes a call to one on another network. The charge gets added up in the final price, which the subscriber has to pay.

The incumbent telecom operators are, however, against any such reduction in the charges.

"Last time we said it should be higher than 14 paisa per minute but they took it down to 14 paisa, so please hold on this and not decrease further," GSM industry body Cellular Operators Association of India (COAI) Director General Rajan S Mathews told Business Standard.

He added spectrum charges are going up, regulatory burden is going up, penalties are increasing so all of the costs on industry are increasing.

"There has been a flurry of consultation papers in the last several weeks? Many of these discussion papers appears to tilt the level-playing field against the incumbent operators, so issues like quality of service, call drops, penalties and now inter-connect, all impact the incumbents as opposed to anybody else. The industry is getting concerned about level-playing filed issue," he added.

The revenue of major three operators are likely to be hit if the charges are reduced further as they have the most number of subscribers and get major share of the termination charges since most calls end on their networks. Smaller or new players would gain as their costs from calls to other networks would come down.

Trai said the consultation paper embarks on the review of the regime for IUC with a focus on domestic termination charges, international settlement rates and international termination charges in the country.

Trai said after the new IUC regime came into effect from March 2015, the retail tariff for voice calls per month have come down to 47 paisa per minute from 51 paisa per minute in December 2014.

It added that the average gross revenue of telcos have also shown a growth rate of 11.6 per cent in FY 15-16, which means it was a win-win situation for both customers and operators.

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