TRAI slashes termination charges for worldwide long distance operators

TRAI slashes termination charges for worldwide long distance operators

TRAI slashes termination charges for worldwide long distance operators

Telecom Regulatory Authority of India (TRAI) on Friday reduced worldwide call termination charges (ITC) to 30 paise from the 53 paise now with effect from February 1, this year.

The termination charge is paid by an global long distance operator, from whose network the call originated, to the Indian telecom operator on whose network it terminated.

The move may negatively impact top three telecom players - Bharti Airtel, Vodafone and Idea Cellular - who, together, are estimated to generate revenues of about Rs. 5,000 crore from incoming worldwide calls.

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

While another analyst said that the reduction in India's ITR would improve margins for foreign companies that carry calls to Indian gateways, Prashant Singhal, TMT head for emerging markets at EY said that outgoing calls from India to other worldwide markets will continue to be expensive, which means Indian consumers won't benefit. "Also, the move does not benefit any customers and will only benefit foreign carriers at the expense of the domestic industry, according to COAI".

Also, the move is expected to address the issue of "serious security threat" that the grey route poses to national security, besides the leakage in revenue due to the country and its carriers.

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The move follows a steep reduction of the domestic Interconnection Usage Charge from 14 paise per minute to 6 paise, effective from October 2017.

"Another issue raised in the CP (consultation paper) was about prescribing International Termination Charge and Prescription of revenue share between Indian ILDO (international long distance) and access provider in the International Termination Charge".

"Any reduction in termination cost is going to have a major impact".

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