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COAI says VoIP apps like Ringo benefit from zero interconnection charges


The Cellular Operators Association of India (COAI) said any asymmetry in setting termination charges between fixed and mobile will prompt a “surge in calling applications (VoIP apps) taking advantage of the arbitrage.” It said that VoIP calling apps like Ringo will further benefit from a regime where interconnection charges are nil or zero. This will allow Ringo to offers talk time at much cheaper rates than the rates offered by telecom operators, added COAI.

“This activity of such apps is not only depriving the legitimate licensed operators of their origination charges but also causing revenue loss to the exchequer,” COAI said.

The lobby body added that fixing a Bill & Keep regime for calls to and from fixed line connections results in “mobile operators cross subsidizing their fixed line competitors and is against principles of fair competition.” The COAI said this in its reply (pdf) to TRAI’s recent consultation paper which looked into revising IUC (Interconnect Usage Charges) charges for VoIP and wireless/wire line calls.

Also Read: ‘Airtel, Idea, Vodafone derailing our plans to launch VoIP services in India’: Ringo

Telecom operators make money out of calls within in network in two-ways. This is explained below through an example.

Through Calling-Party-Pay (CPP) regime: Under the CPP regime, if an Airtel subscriber makes a call to a Vodfaone subscriber, Airtel pays a certain amount of money per minute to Vodafone as a termination charge. This is because an Airtel subscriber starts a call which subsequently terminates on the Vodafone network. Airtel is technically paying to utilize Vodafone’s network for terminating outgoing calls from its network.

Through Bill-and-Keep (BAK) method: Under a BAK regime, Airtel will not need to pay Vodafone any termination charges for calls terminating on Vodafone’s network. Airtel will instead bill its own subscribers for outgoing traffic which it sends to Vodafone and can keep all revenue received from its subscribers.

TRAI currently charges IUC on the basis of the type of network; note that there is no termination charge for calls originating and terminating on wire-line networks:


On setting termination charges from wireline-wireless as zero

The IUC (Interconnect Usage Charges) regime determines how revenue is distributed among telecom players and must remain on a cost based principle as per COAI’s submission to TRAI. COAI said that TRAI’s current regime which has ‘zero’ fixed termination charges for wire-line networks “will not enhance expansion of fixed line services”. There is no data pointing out any “significant increase in the growth of fixed line services,” it added.

On VoIP and Internet Telephony

COAI said in its submission that any consultation on Internet Telephony “cannot be initiated” since the TRAI as well as the DoT had not made its stance clear about “OTT Communication Services” or applications that run on the Internet.  It further goes onto state that under current licensing conditions, an operator holding UASL/CMTS/UL needs to have its own network to provide unrestricted Internet telephony; therefore “even a licensee which is not giving such access network to its subscriber (last mile), cannot provide Internet services/internet telephony.”

If any operator wants to provide unrestricted VoIP services, but does not not have its own telecom network, then it is still equal to OTT Communication Service, and not Internet Telephony Service, COAI added.

“An OTT Communication Service (even when provided by a licensee where that licensee does not have an access network) cannot use any number or address resource to show such OTT Communication Service as Internet Telephony,” the body said.

“This process of determining the termination Charge for the Internet Telephony calls is akin to providing legitimacy to the service which is not allowed to be provided by any non- licensee and thus it amounts to facilitating a back door entry for that entity in terms of allowing it to provide the access service,” COAI said

COAI on setting termination charges for VoIP, Internet telephony: When BSNL submitted a proposal to launch fixed mobile telephony (FMT) wherein calls are hosted via the Internet (3G, 4G, WiFi), COAI raised concerns against it, stating that it allowed BSNL to bypass international termination charges. The TRAI subsequently issued consultation seeking comments to determine setting termination charges for such Internet and VoIP based calls.

COAI has echoed the same statements that it had issued at that time it oppressed BSNL’s FMT service, while adding in its submission to TRAI that determine termination charge for such a service “is in violation to the licensing conditions cannot be taken up through this Consultation.” The association however said that only those players holding a Unified License or ISP license can be allowed to provide unrestricted Internet Telephony.

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