The Telecom Regulatory Authority of India (Trai) has slashed local termination charges by 33 per cent to 20 paise, on the other hand it hiked incoming termination charges by 33 per cent to 40 paise per minute.
These initiatives are expected to pull down the existing call rates in the country, which at 50 paise per minute is lowest in the world.
Prior to the reduction, termination charges - both for local and international incoming – was at 30 paise per minute.
Termination charge for all types of domestic calls like fixed to fixed, fixed to mobile, mobile to fixed and mobile to mobile has been reduced to 20 paise per minute from 30 paise per minute, Trai said in a release today.
Termination charges are paid by one operator to another on whose network the call ends.
Termination charge for incoming international calls would be 40 paise per minute against the existing charge of 30 paise per minute. The authority expects that the service providers would pass on this benefit in the form of lower tariff for outgoing international calls, it added.
The ceiling on carriage of domestic long distance calls retained at 65 paise per minute. Trai expects the non-reduction of this ceiling to encourage national long distance operators to expand into rural areas.
New operators like Datacom Solutions, Unitech and Loop Telecom among others were demanding 0-10 paise per minute termination charge whereas the existing GSM operators were opposing any reduction in the charges, fearing there revenue would take a hit.
Reacting to the changes, Cellular Operators Association of India (COAI) Director General TV Ramachandran said that the revised termination charge of 20 paise per minute did not appear to have factored in all the costs associated with the termination of a mobile call.
He stated that as per the calculations based on international best practices, the three-year forward looking MTC was calculated to be around 35 paise per minute and it was inexplicable how the value of 20 paise per minute had been determined.
Ramachandran, however, welcomed the higher international termination rates “as a small step in the right direction”.
