Dot Slashes Interconnect Charges

The rental charges for the transmission medium, however, remain unchanged. The changes have been incorporated in the revised interconnect agreement that the private basic telecom letter of intent (LoI) holders were given on Saturday.

The charges are paid to DoT for providing interconnection between the private operators' exchanges and those of the department. Interconnection between DoT's network and that of the private operator is important because it provides access to each other's subscribers. Also, interconnection allows private operators to use the transmission network of DoT to carry intra- and inter-circle call traffic.

With these revisions, interconnect charges have been effectively reduced between 30 and 50 per cent depending on the traffic carried by the operator and whether the transmission media are rented or the operator's own.

The port charges (rentals charged by DoT for interconnect equipment at its exchanges) for a 2 Mbps link have been brought down from Rs 1,36,800 to Rs 96,000 a year. Correspondingly, the charge for a 64 kbps link comes down from Rs 4,560 to Rs 3,200 a year.

The changes come a few days before the September 12 deadline for signing the interconnect and licence agreements. It is expected that basic telecom operators will now request for an extension to analyse and factor in the revised interconnect charges into their business plans. DoT officials were not willing to comment state whether an extension would be given. "The deadline stands, but we will have to wait for Thursday (September 12) to examine the possibility of an extension," a source said.

Basic telecom operators conttacted by Business Standard were not happy with the changes that had been made in the interconnect agreement. Even the revised charges, they say, is very high and is substantial as a percentage of per subscriber revenue.

"It is an eyewash. Issues like connectivity to cellular and other value-added networks have not been touched on at all," one telecom official said.

When the interconnect agreement had been circulated among basic telecom operators in June, DoT had come in for strong criticism for the high interconnect charges sought to be levied on them. DoT had designed a three-tiered interconnection charges comprising a registration charge, port rental and rental for transmission media. Operators objected to the imposition of a registration charge and complained that the port charges were high.

Senior DoT officials denied that the revisions had been made under pressure from the private operators. "We have brought about the changes to reflect the costs of providing interconnection. Earlier, we had made some pro-rata assumptions, which we have done away with, and averaged costs to arrive at the present figure," a source said.