COAI asks Trai to rework mobile termination charges

GSM operators' association Cellular Operators Association of India (COAI) today asked Telecom Regulatory Authority of India (Trai) to recalculate the mobile termination charge, saying the regulator has not considered key cost components like capex of operators while reducing the charge to 20 paise.

"It (the fresh MTC as decided by 20 paise) disregards the cost elements. As per international best practices, Capex is included as relevant cost for the determination of mobile interconnection charges. The UK, Malaysia, Pakistan, Brazil, Israel consider such costs while determining MTC," COAI said in a letter to Trai.

The revised interconnect usage charge, of which MTC is a part, was notified by Trai on March 9. It reduced MTC to 20 paise from 30 paise. Termination charges are paid by one operator to another on whose network the call ends.

"The new MTC charge permits only a partial recovery of the cost of ending a call through termination charge by excluding key elements of costs such as cost of capex, thereby, suggesting that the balance should be recovered by way of higher outgoing tariffs.

It will make mobile tariff costlier for the customers. NTP (New Telecom Policy) 99 says operators are free to recover their capex from rentals and origination charges," COAI Director General T V Ramachandra wrote in the letter.