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Updated: TRAI slashes interconnectivity charges between mobile and landline operators

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Update: TRAI has issued an update to The Telecommunication Interconnection Usage Charges (Twelfth Amendment) Regulations, 2015 which slashed the domestic carriage charge by 50% from 65 paise per minute to 35 paise per minute. This regulation will be effective from 1 March 2015. Carriage charges are the charges a telecom service provider pays a National Long Distance Operator to carry inter-Licensed Service Area calls.

Service providers proposed to reduce the ceiling on carriage charges which was fixed in 2006 to reduce long-distance calling tariffs and offer uniform STD tariffs across the country. This move was made on the basis of comments from stakeholders in writing, during open house discussions and internal analyses.

Earlier (February 24): Landline-to-mobile and mobile-to-mobile call rates are likely to fall as the Telecom Regulatory Authority of India (TRAI) reduced interconnection (operator-to-operator) charges for network usage. TRAI has also gotten rid of the charges paid by landline service providers from one service provider to another in a bid to encourage the use of landline phones. The interconnection charges are included in the user-end tariff paid by customers when they make landline or mobile to mobile calls.

Initially, through ‘Telecommunication Interconnection Usage Charges (Eleventh Amendment) Regulations’, the interconnection usage charge between mobile providers was 20 paise and has now been slashed to 14 paise amounting to a charges reduction of 30%. Previously, landline-to-landline or landline-to-mobile interconnection charges were 20 paise and has now been reduced to 0.

Wired line connections in India have seen a steady decline over the last decade as wireless line subscriptions increase. However, wired line connections are yet to drop below wireless line subscriptions yet:

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The Telecommunication Interconnection Usage Charges (Eleventh Amendment) Regulations, 2015 (1 of 2015) states that “Since the Government is poised to build country-wide digital infrastructure with the aim to connect one and all under the state-sponsored ‘Digital India’ campaign, India simply cannot afford to let the wireline telephony infrastructure (which was primarily built from the exchequer’s money) to languish in the current pitiable state. Indeed, the revival of wireline networks in the country is an important policy and regulatory priority to complement the Government’s mission.”

The calling-party-pays (CPP) regime, which is attributed to fast growth in the telecom services sector in India, was established by the TRAI through ‘The Telecommunication Interconnection Usage Charges (IUC) Regulation, 2003 (1 of 2003)’.

These moves were proposed:

(i) to protect the interests of consumers – by way of ensuring adequate choice and affordable services to them by promoting competition and efficiency in the market, and;

(ii) to create incentives for Telephone Service Providers – by way of ensuring adequate (fair) returns on investment so as to stimulate orderly growth and innovation in the sector.

ET previously reported that the Modi-led government’s digital drive has an initial outlay of INR 113,000 crores and has tremendous potential. It remains to be seen how much end-user customers like us will benefit from this move, although industry analysts are hopeful that call charges for customers are likely to decrease too.

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