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Our Bureau

New Delhi, March 9

Telecom tariffs are expected to come down from April 1 with the telecom regulator on Monday announcing a 33 per cent reduction in charges operators pay each other.

The Telecom Regulatory Authority of India said that telecom companies will pay a termination charge of 20 paise a minute compared with 30 paise at present.

Termination charges are paid by the operators on whose network the call originates to the operator on whose network the call ends. Consumers can expect to get 10 paise a minute lower tariff if the operators pass on the reduction in the charges.

“The authority expects the service providers to pass on this benefit in the form of lower tariff,” TRAI said in a statement.

The new mobile players will be the first to drop the tariffs as they stand to gain from the regulator’s move. Tata Teleservices, which is launching its pan-Indian GSM services soon, said, “We have been advocating a reduction in termination charges for a long time. The TRAI has announced this now and we welcome the move — this will bring down tariffs and benefit the Indian telecom consumer.”

Though the new players, including Swan, Loop, Unitech and Reliance Communications, were lobbying for a complete waiver of the charge, the 10 paise reduction will mean that they will end up paying out lower termination rates to the existing players.

“We were hoping that TRAI would bring the mobile termination rates to less than 9 paise a minute.

“However, we will pass on to the consumer whatever reduction the regulator has announced,” said another new player.

However, existing pan-Indian GSM operators who have a large customer base, will stand to lose on revenues earned from collecting the termination fee.

Operators, including Bharti Airtel and Vodafone Essar, receive more incoming calls on their network and a lower termination charge will mean lower collections.

“This could constrain operators to re-assess their business viability before venturing out in the rural and remote areas, where the low revenues may not adequately compensate the operators for the huge investments required for rural rollout,” said Mr T.V. Ramachandran, Director General, Cellular Operators’ Association of India.

The telecom regulator has tried to do a balancing act by increasing the termination charges on incoming international calls from 30 paise a minute to 40 paise.

While this will have no impact on Indian consumers, it will reduce the gap between what Indian operators pay out to international carriers and what they get from them.

On an average, Indian operators pay a termination rate of Rs 3 a minute to international carriers. “TRAI should have left it to the operators to negotiate with the international carriers. By putting a cap of 40 paise, Indian players are still at disadvantage with regards to their international counterparts,” said Mr B.K. Syngal, Senior Principal, Dua Consulting.

The regulator has also proposed to reduction in the carriage from the current level of 20 paise a minute to 15. This could result in lower tariffs for calls made from a private operators network to BSNL’s 35 million fixed line users.

More Stories on : Telecommunications | Regulatory Bodies & Rulings

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