The Hindu Business Line : TRAI agrees to review termination charges

New Delhi, June 27 The Telecom Regulatory Authority of India on Friday said that it will undertake a review of the existing termination charges paid by one operator to another.

Termination rates are paid by the telecom operator on whose network the call originates to the operator on whose network the call ends. At present, the originating operator pays up to 30 paise a minute as termination charge.

The Department of Telecom had earlier asked TRAI to take a relook at the charges. DoT has proposed to bring this down to 10 paise a minute, which will bring down tariffs by 20 paise.

TRAI had fixed the existing rates in 2003 and since then has not shown any inclination to reducing it despite decrease in costs for operators. Termination rate is a factor of the cost incurred by the operator in letting the call end on its network.

Affordable rates

“Given the central aim of telecom policy to provide services at affordable rates, it is suggested that a review of the mobile termination charges, based on present and projected cost and traffic is undertaken by TRAI on a priority in a time bound manner,” a DoT note to TRAI said.

“One of the major component of tariff is the termination charge, which is regulated by TRAI and not the market forces. The high termination charges have potential to stifle competition and may disturb the level playing field,” the note said.

Pushing for a downward revision, DoT said the termination charges were a function of traffic and as such high increase in traffic must translate into reduction in the charges. Minutes of usage have increased from 326 minutes per subscriber per month in October 2003 to 464 at present.

A lower termination rate will also benefit the new operators as their net outgo to existing operators with 300 million subscribers will reduce. Therefore, any move to reduce termination rates may be opposed by existing players who stand to lose out revenues.

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