TRAI starts review of telecom interconnect charges

Sectoral regulator Trai today started review of interconnection charges -- paid by one telecom operator to another for connecting phone calls -- against the backdrop of 4G and Internet telephony changing the way consumers communicate.
At present, the termination charges for a mobile to mobile local and national long distance call is pegged at 14 paise per minute, while the termination charges for international incoming call to wireless and wireline stands at 53 paise per minute.
Trai had prescribed 'zero' domestic termination charge for calls originating/ending on wireline networks, aimed at promoting adoption of landlines.
In its consultation paper on IUC today, Telecom Regulatory Authority of India has sought public view on how domestic termination charges should be computed -- cost based or Bill and Keep (BAK) -- for "maximisation of consumer welfare", adoption of more efficient technologies and growth of the telecom sector in the country.

Put simply, in BAK method, each telecom operator bills its own subscribers for outgoing traffic that it sends to other interconnecting network and keeps the revenue received from its subscribers.
The paper also seeks views on how these charges would be impacted as telecom operators move to Internet Protocol-based networks.

"Essentially, with the new arrivals viz. Voice over LTE (VoLTE) and Internet Telephony, any attempt to set uniform domestic termination charges on cost basis would be a challenging task," it added.
The Paper further said "...The Authority had indicated that the termination charges would be reviewed after two years of being in force. Generally, a comprehensive regulatory review exercise in TRAI takes 6-9 months' time to complete and, hence, the present review exercise is being undertaken."

The Paper comes against the backdrop of growing popularity of 4G networks and a scheme announced by BSNL that allowed customers travelling abroad to make calls from their mobile phones using their landline connection back home without attracting ISD charges by downloading the state-run operator's app.
Recently, Trai had also floated a consultation paper to fix framework for Internet telephony where incumbent telecom operators have asked about charges that should be levied for accepting internet based calls on their network.
The last date for submission of IUC comments is September 5 and that for counter-comments is September 19, 2016.