Cutting of worldwide call termination charges may cost dear to telcos

Cutting of worldwide call termination charges may cost dear to telcos

The Telecom Regulatory Authority of India on Friday cut the termination charge on incoming global calls to 30 paise per minute from 53 paise.

On the contrary, Cellular operators' association COAI, a couple of months ago, had favoured a steep hike in worldwide termination charges stating that there is a need to bridge the gap between blended termination rate paid by Indian operators for outgoing global calls and the termination rates received by them on global incoming calls.

"The Authority has reduced the termination charges payable by an International Long Distance Operator (ILDO) to the access provider in whose network the call terminates from Rs 0.53 per minute to Rs 0.30 per minute", Trai said in a statement. "It is expected that if the arbitrage opportunity is plugged or kept to a minimum, the attractiveness of the grey route for carrying worldwide incoming voice traffic would be lost, and thereby, the carrier route for global incoming traffic would witness a legitimate growth".

The new rate comes into effect from February 1.

It added that the grey market, which routes worldwide calls by setting up illegal voice-over internet protocol gateways, needed to be curbed.

Indian telecom operators are already going through severe financial issues, and this move will further increase their woes.

"The reduction in ITC is against national interest, as the country will lose precious foreign exchange, due to a sharp reduction of 43% in ITC by TRAI", Rajan Mathews, director general of the association said while reacting to the development. Indian telcos are yet to comment on this massive announcement from the regulator.

Incumbent carriers have argued for an increase to Re 1 from 53 paise a minute, and then to Rs 3.5 per minute overtime, which will be in line with other countries' high rates. Earlier, TRAI cut interconnect usage charges (IUC) for mobile calls to 6 paise a minute from 14 paise. "The Authority is of the view that there is a need of more deliberation on the issue, and therefore the Authority will issue a separate regulation on this issue", Trai said in its September 19 order while slashing the domestic interconnect usage charges.

The number of global calls made to India were comparatively lesser than those originating from the country.

Most of these worldwide calls terminated on Bharti Airtel, Vodafone and Idea's network.

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