GSM, CDMA operators unhappy over MTC cut

The initial euphoria over reduction in mobile termination charges (MTC) seems to be dying down, with telecom service providers now alleging that the process is completely “flawed”.

On the one hand, the GSM operators are alleging that the slash will result in increase in mobile tariffs and impede rollout plans, while on the other hand the CDMA operators are seeking a further reduction.

Incidentally, when the reduction was announced, both the GSM and CDMA operator associations had hailed it as a move in the right direction. Earlier this month, the Telecom Regulatory Authority of India (Trai) slashed MTCs to 20 paise from 30 paise per minute.

The Cellular Operators’ Association of India (COAI) has written a letter to Trai, stating that the calculations for the reduction were based on “incomplete data”. Additionally, the GSM operators’ body has urged Trai to reconsider its calculations, sources close to the development told Business Standard.

On the other hand, the CDMA operators’ association, Association of Unified Service Providers of India (Auspi), has sought an additional 10 paise cut. In a letter to Trai written last week (March 24), Auspi said it was “deeply perturbed” by the amendment and stated that there were anomalies in the revised MTC.

“There are a lot of anomalies in the recent cut in MTC, which is leading to a highly-inflated MTC, and we have pointed out the same to Trai in our letter. There needs to be a further reduction, and in our view the

MTC should be around lO paise per minute,” Auspi Secretary General S C Khanna said.

The association had alleged that the costing model arrived by Trai did not take into account the surge in telecom subscriber base. It also stated that the increasing per subscriber cost was flawed (in the costing model).