ISD incoming call termination rate slashed

ISD incoming call termination rate slashed

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

On the contrary, Cellular operators' association COAI, a couple of months ago, had favoured a steep hike in global termination charges stating that there is a need to bridge the gap between blended termination rate paid by Indian operators for outgoing worldwide calls and the termination rates received by them on global incoming calls.

The latest rule from TRAI issued as part of the Telecommunication Interconnection Usage Charges (Fourteenth Amendment) Regulations, 2018, will benefit the operator which carries calls outside the country, officially referred to as the International Long Distance Operator (ILDO). Back in February 2015, TRAI increased the ITC to 53 paise per minute from 40 paise per minute. The new regulations will come into force from February 1 next month.

However, industry body COAI said the decision will lead to annual revenue loss of Rs 2,000 crore which the Indian telecom operators earn from foreign service providers.

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One of the executives belonging to older carriers said, after Friday's announcement, that industry was would have benefitted from incremental forex of Rs 6,000 crore had the ITC been increased to Rs 1, and an additional forex of around Rs 10,721 crore had the ITR been eventually increased to Rs 3.5 per minute.

"Incumbent revenue from worldwide calls terminating here will be directly and proportionally impacted by the 43% reduction in ITR", said Mritunjay Kapur, head of telecom, media and technology at KPMG India.

"Any reduction in termination cost is going to have a major impact".

Telecom firms levy termination charge on operators from whose networks calls have been made for transmitting them to the subscriber. Trai also said the "menace of grey route poses serious security threat to the country apart from causing significant leakage in the revenue accruable to the country" and telecom operators."Authority is of the view that, while deciding on the appropriate level of ITC in the country, curbing the menace of grey route should be a more important regulatory priority than facilitating the shift of the worldwide incoming traffic from OTT route to carrier route", Trai said. An operator charges their rival an Interconnection Usage Charge when a user ends a domestic call on their network.

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