TRAI cuts ISD incoming termination charges; telecom industry cries foul

Telecom sector

TRAI cuts ISD incoming termination charges; telecom industry cries foul

Telecom firms levy termination charge on operators from whose networks calls have been made, for transmitting them to the subscriber.

Countries such as the US, UK and Germany charge 67 paise, Rs 13.36 and Rs 10.69, respectively, as termination charge per minute for worldwide incoming calls, far higher than India's 53 paise a minute.

The move may negatively impact top three telecom players - Bharti Airtel, Vodafone and Idea Cellular - who, together, are estimated to generate revenues of about ₹5,000 crore from incoming worldwide calls. The charge is recovered from subscribers by global operators. At present, about 20 per cent worldwide incoming calls terminate in India via grey routes.

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However, the COAI argued that the move of reducing the rate by almost 43 per cent could result in loss of foreign exchange, as well as a loss of revenue to the exchequer from licence fee and GST. "Also, the move does not benefit any customers and will only benefit foreign carriers at the expense of the domestic industry, according to COAI".

COAI added that one of its members, Reliance Jio, had a divergent view on the issue.

According to Trai, the reduction in termination charge would reduce arbitrage with domestic call tariffs, therefore plugging the illegal VoIP gateway business in India, which will in turn lead to the eradication of the grey market for worldwide incoming traffic. It said that "curbing the menace of grey route should be a more important regulatory priority than facilitating the shift of the worldwide incoming traffic from OTT to carrier route".

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But TRAI said the move could curb the use of grey routes and the proliferation of OTT (over-the-top) routes for global voice calls.

Trai had past year reduced domestic termination charges to 6 paise from 14 paise earlier.

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