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New TRAI regulation likely to lead to lower international call rates

In a move that is likely to force mobile network operators to lower international roaming rates, the telecom regulator TRAI has fixed the access charges payable by International Long Distance Operators (ILDOs) to the local mobile network operators for international calls at 40 paisa per minute for wireless services and Rs 1.20 per minute for wireline services. This new regulation will allow consumers to purchase calling cards from any long distance operator, and avail competitive international call rates.

Over the past decade TRAI has been trying to increase consumer choices in the long distance calls sector, which would allow consumers to take advantage of competitive prices. However, network providers have consistently tried to defer introduction of competition in this sector.

Currently, consumers don’t have the option to select their long distance operator for international calls, and are dependent on local network operators. These operators select the long distance operator, who carry the call to international destinations based on mutual commercial agreements, which in turn increases the call charges consumers need to pay. At present, 27 long distance operators have the permit to provide international calling service in India, but a number of these are part of major telcos like, Bharti Airtel, Reliance Communication, Vodafone and BSNL. Companies that only have license for long distance service don’t have direct access to consumers, and are forced to partner with mobile network providers. This allowed network operators to charge prohibitive access charges to monopolise the business.

TRAI said that in 2008 telecom service providers had suggested that long distance operators should be allowed to issue calling cards to provide consumers with greater choice. TRAI amended licenses in 2010, to allow long distance operators to directly issue international calling cards to consumers. The telecom regulatory body also amended the Intelligent Network Regulation in 2012, to facilitate interconnect agreements between mobile network service providers. However, TRAI notes that service providers have failed to act on directions issued by TRAI (the first one dates back to July 2002) to provide consumers with the option of choosing their long distance operators.

High access charge

In November 2013, TRAI had issued a consultation paper titled ‘Revenue Sharing Arrangement for Calling Card Services’, with the objective of discussing various issues related to revenue sharing arrangements for calling card services. At the time, TRAI had said that some of the telecom service providers were charging a high access charge from long distance operators, which was deterring the growth of the calling cards business.

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