Global carriers will have to cough up more for bringing in calls from markets such as the US into India.

Thomas K. Thomas

New Delhi, July 21

Appreciation of rupee against dollar is now having an impact on the international long distance telephony segment as well. State-owned Bharat Sanchar Nigam Ltd (BSNL) is proposing to increase the termination rates for incoming international long distance calls being routed through its Bharat Lanka Cable.

The proposed increase is as high as 30 per cent in some cases where the termination charges is being revised up from 4 cents per minute to 5.6 cents per minute.

Global carriers

While the increase will have no impact on Indian telephone users, global carriers such as Teleglobe and Sprint will have to cough up more for bringing in calls from markets such as the US into India.

Termination charge is the tariff paid by the global carriers to Indian operators for carrying the calls on its network within India.

Since the payment is made in dollars, the total receipt for BSNL has gone down making it below cost of service.

Revised rates

Therefore, termination charges for ILD calls terminating on BSNL’s mobile network is being revised from 4.5 cents per minute to 5.1 cents, from 4.9 cents to 5.5 cents for calls terminating on BSNL fixed line network in category A & B Circles and from 5.5 cents to 6.1 cents per minute for calls terminating in other parts of BSNL’s network.

Apart from the appreciation factor, BSNL has also pointed out that the increase in termination rates is necessary due to imposition of service tax and education cess by the Government and higher carriage charges.

Rupee impact

Market watchers pointed out that operators are working on wafer-thin margins in the international telephone segment and, therefore, long-term change in the value of rupee against the dollar could have an impact on the settlement rates of not just BSNL but also the private operators.

(This article was published in the Business Line print edition dated July 22, 2007)
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