Trai cuts ISD incoming call termination rate

Cutting of international call termination charges may cost dear to telcos

After slashing the domestic interconnect charges, the Telecom Regulatory Authority of India (Trai) today slashed the worldwide interconnect charges from 53 paise per minute to 30 paise per minute, increasing the woes of Indian telecom operators.

The telecom regulator has slashed global termination charge (ITC) by 43%.

"The Authority has reduced the termination charges payable by an International Long Distance Operator (ILDO) to the access provider in whose network the call terminates from Rs 0.53 per minute to Rs 0.30 per minute", Trai said in a statement.

Trai added that the move would not only plug the leakages in the revenue accruable to the country and Indian telecom players but would also ensure that India continues to earn foreign exchange from the worldwide incoming voice traffic business.

"The reduction in ITC is against national interest, as the country will lose precious foreign exchange, due to a sharp reduction of 43% in ITC by TRAI", Rajan Mathews, director general of the association said while reacting to the development.

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Trai has argued that 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. They were, in fact, going to ask for an increase in the rates to Re 1, and then later to Rs 3.5 per minute, The Economic Times reported. TRAI issued a consultation paper on "review of interconnection usage charges" on August 5, 2016, for seeking comments of industry stakeholders.

These rates are paid by foreign carriers for terminating worldwide calls in India. Back in February 2015, TRAI increased the ITC to 53 paise per minute from 40 paise per minute.

The move, however, would negatively impact incumbent carriers, as they would stand to lose a large chunk of Rs 5,000 crore of revenue that comes from incoming worldwide calls. An operator charges their rival an Interconnection Usage Charge when a user ends a domestic call on their network.

TRAI said the new rule "shall come into force from the 1st February, 2018". The prices of worldwide calls are expected to drop.

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