NGO alleges cartelisation by telcos in SMS fee, moves TDSAT

PTI New Delhi | Updated on November 25, 2012 Published on November 25, 2012

A city-based NGO had approached telecom tribunal TDSAT challenging SMS termination fee being charged by telecom operators and alleged companies are “doing this illegal activity in a cartelised manner“.

Termination charges are paid by an operator on whose network calls or SMSes originate to another operator on whose network these communications end. These charges have a direct bearing on SMS tariff.

The NGO Telecom Watchdog has alleged that SMS termination of 10 paise is imposed arbitrarily on customers through agreements between operators. It further alleged that sectoral regulator TRAI is not doing enough in this regard.

“They (operators) are doing this illegal activity in a cartelised manner. Some of the operators have come before the tribunal (TDSAT) and have challenged this provision, but are not really contesting the issue since it suits their requirement to hike the tariff to the consumer in a uniform/ cartelised manner,” said the NGO in its petition filed through its counsel Prashant Bhushan on November 22.

The NGO has requested TDSAT to direct TRAI to ask operators not to charge SMS termination charges till a reasonable tariff is fixed.

It has also requested TDSAT to declare that termination charges are “exorbitantly high and do not reflect the true cost of providing services“.

According to the NGO, Short Message Services (SMS), which are an extremely low-cost and effective service, are left by Telecom Regulatory Authority on India (TRAI) to private operators to decide.

“In a recent tender by BSNL for its GSM network, the cost of SMS system work out to be under $0.15 (Rs 8.25) per subscriber. This includes hardware, software licence, installation and commissioning, testing, spares and on—site warranty after commissioning,” the NGO said.

Based on the calculations “a consumer could use the SMS at very low cost, almost 1 paise per SMS and operators would still make the profit on this service”, the NGO claimed.

“However, a recent trend has been observed under which the incumbent GSM operators have started insisting for payment of 10 paise per SMS through bilateral agreements. If the termination charges are to be made mandatory through bilateral agreements and its price is fixed at such a high level, then the consumer would suffer heavily.

“The cost would increase 1,000 times making the service unavailable” and would not reflect the true cost. Even TRAI had admitted in one of its consultation paper that the cost of SMS is 1/144 times lower than termination of a call.

According to the NGO, “if one looks at the history of the termination charges, all these charges are on decline.

TRAI has been fixing and revising these charges on the basis of cost plus method. There was never case when any of these charges were increased”.

Published on November 25, 2012
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