Updated : Dot For Review Of Termination Charges; Mobile Tariffs May Fall

[Honest 836]

DoT for review of termination charges; mobile tariffs may fall

NEW DELHI: In what could bring down mobile tariffs further, the department of telecom (DoT) has asked the Telecom Regulatory Authority of India (TRAI) to review termination charges and make them cost-based.

Termination charges are paid by the telecom operator, in whose network the call originates, to the operator on whose network it gets terminated. These charges, fixed in 2003, currently stand at about 30 paise/minute. DoT has asked for a review on priority basis, current call traffic and cost of network & services be taken into account to formulate revised charges.

“Given the central aim of telecom policy to provide services at affordable rates, it is suggested that a review of the mobile termination charges, based on present and projected cost and traffic is undertaken by TRAI on a priority in a time bound manner,” the telecom department has said in its letter to TRAI. Industry players’ estimates show that cost-based termination charges would be as low as 10 paise/minute.

A senior TRAI executive said that no such letter has been received by the regulator. In its letter, DoT also noted that high termination charges could stymie competition in the telecom arena, especially when new telecom players are entering the fray.

“One of the major component of tariff is the termination charge, which is not under forbearance. The high termination charges have potential to stifle competition and may disturb the level playing field,” the DoT noted. Termination charges are a function of traffic and a high increase in traffic should translate into reduction in such charges, it added.

“The reduction in termination charges will lead to reduction in pay outs of the operators thus making the tariffs more viable and sustainable in the competitive environment,” the telecom department said.

[KumaarShah 143]

The above exercise will take atleast 6 months, IMHO.

[Honest 836]

^^^

Yes my dear Kumaar, even if it takes 6 months then also in the end the customer will get the benefit.

Regards.

[@ksh@T 20]

reliance gave benefit after 1 month of airtel . .

[Honest 836]

Cut in call tariffs may be delayed

31 Aug, 2008, 1237 hrs IST, PTI

NEW DELHI: There could be a delay in further fall in call tariffs as telecom regulator TRAI is unlikely to come out with revised mobile termination charges soon. "We haven't started working on it (termination charges) yet. Right now we are examining on various methodologies, global practices to calculate fresh termination charges. Once we have zeroed in on methods, then we would see what kind of information we need from operators," TRAI Chairman Nripendra Misra told PTI.

He said once data flows in, then TRAI would issue a consultation paper, followed by public discussions and then the recommendation would come out. Although he did not give a time-frame, going by the exercise it would not be less than at least two-three months. Misra said charges were fixed in 2003 when Interconnect Usage Charges (IUC) were decided. That time TRAI had written there was a need to review the IUC after 2-3 years. So it is a normal review process, he added.

The termination charges in 2003 were fixed at 30 paise a minute and considered too high. Since then the cost of network and services has come down by more than 50 per cent. Sensing this, the Department of Telecom, in June this year had asked the telecom regulator to cut mobile termination charges for lower tariffs. Higher termination charges might stifle competition, DoT had warned.

[KumaarShah 143]

^^^

Looks like what I said earlier may come true!!!!

[Honest 836]

^^^

MY dear Kumaar, yes you was right earlier also.

It seems that you are having a THIRD EYE !!

Regards.

[Honest 836]

TRAI to review termination charges

Economic Times l 2 Oct 2008 l New Delhi

Telecom regulator TRAI has sought data from all telcos in a bid to review the mobile termination charges. After studying the data, Trai will fix the methodology it plans to adopt for revising the termination charges.

Telcos have been asked to submit their traffic data by October-end. Any reduction in termination charges will result in lower tariffs for customers.

At present, telcos can charge a maximum of 30 paise per minute as termination charges, but these rates were fixed in 2003. Mobile tariffs have fallen by over 50% since then.

Termination fee is the charges paid by one operator to another for enabling the calls to move between the networks. For instance, if a Bharti Airtel customer makes call to Vodafone subscriber, Airtel will pay 30 paise per minute to Vodafone as termination charges.

“We must determine the methodology for reviewing termination charges —it can be a cost-based model or it can be determined by considering the long-term incremental cost. Unless we analyse the data, we cannot quantify any reduction in termination fee. Even if we issue a consultation process, we must specify the different methodologies,” a Trai source said. The DoT has already asked Trai to cut mobile termination charges.

[Honest 836]

DoT seeks termination charge review; refers to TRAI

Press Trust of India l 23 Nov l New Delhi

NEW DELHI: Mobile telecom tariffs may see a further dip as the government has asked regulator TRAI to review the five-year old termination charge of 30 paise a minute per call for fixed and mobile telephony.

Termination charge is the money given by an operator on whose network a call originates to the operator on whose network the call terminates.

The termination charge at 30 paise a minute per call for mobile telephony is considered high, especially by the new players. It was fixed five years ago and since then cost parameters have changed considerably.

"Termination charges reduction reference has gone to TRAI. They have to recommend us what to do (whether to bring it down or not. TRAI is a statutory body it can't be dictated on what to be done. It is being discussed in TRAI to look into the possibility of bringing down the termination charges)," Telecom Minister A Raja said here.

Although it is over four months since DoT referred the matter, TRAI is yet to review charges for fixed and mobile services.

Five years ago TRAI prescribed call termination charges for fixed and mobile services. A TRAI official said the regulator has not been able to see the reason for reducing the termination charges.

TRAI prescribed termination charges for fixed and mobile services through its regulations on October 29, 2003. This was done on the basis of cost data submitted by various service providers for the years preceeding it.

In June 2008, DoT asked TRAI to review the termination charges based on present and projected cost and traffic on the premise that the volume has gone up.

"Given the central aim of the NTP'99 to provide telecom services at affordable rates and the unprecedented expansion of telecom services, DoT suggests that a review of the mobile termination charges, based on present and projected cost and traffic, is undertaken by TRAI on priority basis and in a time bound manner," DoT officials said.

The new mobile operators who have been given licences in January this year and as they are in the process to start services, review of termination charges would be crucial for them to compete in the market especially in the urban areas.

[Honest 836]

Termination charges should come down: Raja

Press Trust of India l 25 Nov l New Delhi

Mobile telecom tariffs may come down with the government admitting that termination charges should be reduced from the existing level of 30 paise a minute and has sought Telecom Regulatory Authority of India's (Trai) recommendations on the same.

"I feel that termination charges should come down. We have asked Trai's recommendations on a priority basis (on this issue)," Telecom Minister A Raja said at the Economic Editors' Conference here.

Asked by how much the termination charge should be reduced from the existing level of 30 paise a minute, the minister refused to indicate saying "that is Trai's job to work it out".

Termination charge is the money given by an operator on whose network a call originates to the operator on whose network the call terminates.

The termination charge at 30 paise a minute per call for mobile telephony is considered high, especially by the new players. It was fixed five years ago and since then cost parameters and the traffic volumes have changed considerably.

Although it is over four months since Department of Telecom (DoT) referred the matter, Trai is yet to review charges for fixed and mobile services.

In June 2008, DoT asked Trai to review the termination charges based on present and projected cost and traffic on the premise that the volume has gone up.

"Given the central aim of the NTP'99 to provide telecom services at affordable rates and the unprecedented expansion of telecom services, DoT suggests that a review of the mobile termination charges, based on present and projected cost and traffic, is undertaken by Trai on priority basis and in a time bound manner," DoT officials said.

The new mobile operators, who have been given licenses in January this year and as they are in the process to start services, review of termination charges would be crucial for them to compete in the market especially in the urban areas.

[Honest 836]

Review of termination charges may take time

Business Line l 27 Nov l New Delhi

Operators not providing data, says TRAI.

The telecom regulator has said that review of termination charges, as suggested by the Department of Telecom, is a complex exercise especially since the operators are not forthcoming in providing adequate data.

Termination charges are paid by the operator on whose network the call originates to the operator on whose network the call ends. This fee is determined by the TRAI and has been fixed at 30 paise a minute.

The Department of Telecom has now asked the regulator to review this fee on the grounds that lowering the charge would enable cheaper mobile tariffs. New operators who are about to launch their mobile services are also keen to have a lower termination rate.

While TRAI has said that it will issue a consultation paper to discuss the issue in December, it said that a review cannot be done in a hurry. “There is no short cut to this exercise. It would be pertinent to mention that British regulator Ofcom initiated preliminary consultation on termination charge in June 2005 and detailed consultation in March 2006 and the regulatory statement was finally issued in March 2007.”

Sources indicated that Indian authorities may also take at least a year before new termination charges are finalised.

“As evident from all previous consultation processes, the IUC review exercise is a complex exercise and any undue haste may prove to be detrimental to the industry and the consumers and give rise to avoidable litigation. Any half-baked effort may re-open issues that have already been fairly settled,” the TRAI said.

As part of the pre-consultation process all the operators were asked to submit the cost-model, data assumptions and the result of their calculations. However, most service providers have not provided the data.

“This makes the job of review even more complicated for TRAI. Also the industry has presented different viewpoints including methodology to determine interconnection usage charges,” the regulator said.

[Honest 836]

Telecom tariffs set to fall in 2009

Economic Times l 31 Dec l New Delhi

Come 2009, telecom tariffs are set to fall significantly! Sector regulator TRAI on Wednesday set the ball rolling for lower tariffs by seeking the industry's views on reducing the interconnect charges (IUC).

Since IUC charges constitute a significant amount of the call charges, any reduction in this will reflect in a direct fall in tariffs. Telecom minister A Raja had earlier told ET that a reduction in IUC tariffs coupled with increased competition with the entry of several new players could lead to local call tariffs being as low as 10 paise per minute and STD at about 25-35 paise per minute by 2010.

Inetrconnect Usage Charges are those charges that are payable by one telecom operator to the others for use of their networks either for origination, termination or carriage of a call. Inter operator calls constitute a major part of the total calls handled by the telecommunications network. These charges are important as they can transfer network costs between operators and thus affect their relative scale and prosperity.

IUC charges can be best illustrated as follows: If a Bharti Airtel customer were to make a call to a Vodafone user, the latter can charge up to 30 paise per minute for terminating the call on its network. Similarly, if the same call were to be carried on the optic cable fibre of say BSNL, the state-owned telco can charge a maximum of 72 paise per minute for carrying the call. Therefore, a significant amount that a customer pays for a mobile call is constituted by IUC charges.

The current regime is as follows:

Mobile termination charge ranges from Rs 0.13 to Rs 0.30 per minute

Fixed termination charge varies from Rs 0.19 to Rs 0.28 minute

Average Carriage Charges per minute after considering the cost in respect of all NLDOs ranges from Rs 0.16 to Rs 0.72 per minute

These charges were fixed way back in 2002-03 and have not been reviewed since then, even as the overall call tariffs have by over 300% during the same time period.

The regulator will announce a reduction in IUC charges after it receives inputs from the industry.

In addition to lower tariffs, a reduction in IUC charges will also enable several of the new players who were granted telecom licences earlier this year to reduce their operational costs when they launch services. New entrants and some of the existing operators have been demanding a reduction in IUC tariffs for a long time.

"Establishment of IUC is therefore an activity of far reaching consequences for the telecommunications sector. It enables competition, welfare of customers and sustained growth of telecom and development of the country. It determines revenue accruals and its dispersal among networks and services and promotes their development in correct measure," TRAI said in a statement on Wednesday.

[ravi_patent 28]

http://www.thehindubusinessline.com/2009/0...10152220100.htm

New Delhi, Dec 31 If the telecom regulator’s proposal to bring down various charges payable between operators goes through, mobile tariffs could come down by 20-30 per cent in the New Year.

In a consultation paper issued to review the interconnection usage charges (IUC), the Telecom Regulatory Authority of India has indicated that mobile termination charges could be as low as 13 paise a minute compared to the existing rate of 30 paise a minute. Termination charges are paid by the operators on whose network the call originates to the operator on whose network the call ends.

This means that if a mobile user is currently paying Re 1 per minute for making a local call, he may be able to make the same call at 80 paise a minute.

Mobile users could get further discounts on long distance calls as the regulator has also proposed to reduce the ceiling charges for carriage from the current level of 65 paise a minute. TRAI said that carriage charges can be as low as 16 paise for each minute. Carriage charges are paid by cellular and fixed line service providers to long distance telephone operators.

New players may gain

New players stand to gain if the proposals go through as their pay out in the form of termination charges to existing players will come down substantially. This is expected to be passed on to the subscribers.

Mr Rajiv Mehrotra, Chairman, Shyam Group, said, “TRAI should bring the mobile termination rates to 9 paise a minute. If these charges are lowered then local calls rates will come down to lower than 50 paise a minute.” Shyam is one of the new players, which has partnered with Russian conglomerate Sistema to offer CDMA based mobile services across the country. Other new players include Swan Telecom, Unitech, Datacom and Loop Telecom.

Existing CDMA based mobile operators said that a reduction in termination charges will bring down tariffs. Both Reliance Communication and Tata Teleservices are practically new players in the GSM segment and could gain if the regulator decides on a lower charge.

Mr S.C. Khanna, Secretary General, Association of Unified Telecom Service Providers of India, said, “A reduction in termination rates will encourage new players. It will also benefit the customers as the new operators will be able to offer tariffs that are substantially lower than the existing charges.”

Revenue loss

However, pan-Indian GSM operators who have a large customer base, will stand to lose on revenues earned from collecting the termination fee. “If international methods are adopted then it would not come down to the levels as is being proposed by the regulator,” said a Cellular Operators Association of India executive.

Going by the division in the industry over the proposal, the telecom regulator will have to do a balancing act.

While TRAI has indicated a lower charge for both carriage and termination charges, the regulator has also given a higher value in the consultation paper.

For example in the case of mobile termination charges, the TRAI has indicated that it could be 28 paise a minute in which case there will be no impact on the tariffs at all. TRAI said that the proposed charges are only indicative.

“The preliminary estimates of ranges in termination and carriage charges are only indicative as the Authority would make appropriate analysis after the methodology and various inputs going into the methodology are firmed up,” TRAI said in a release.

A final decision is expected by March 31, 2009 after taking inputs from the industry. Fixed line subscribers could also benefit as the regulator has indicated that the termination charges for fixed line services could also come down to 19 paise a minute from 30 paise.

But such a move will impact state owned BSNL’s revenues since it will receive lower charges from private operators who terminate their call to any of the PSU’s 35 million fixed line telephone users.

[Himanshu Singh 19]

My belief is that the call charges cant come below 50paise per minute for local calls and Re1 for national long distance calls..A high termination charge regime suits the public sector telecom companies such as BSNL as well as the biggies like Reliance and Airtel..Moreover to let the telecom sector remain profitable and a viable business for the operators its necessary to cut out the cut throat competition in tariffs..They should rather compete for quality of services.

[Honest 836]

^^^

Yes my dear friends, Quality of Service is a must rather then cheap call rates.

[commonman 228]

3p per min. from 1 crore customer would still be 10 times higher than 30p per min. from 1 lakh customer.

between 2003 and now mobile customers have gone 100 times more. the infrastructure practically remains same.

just imagine the revenue generated.

its time for sharp reduction in this area. although virgin customers may lose their 10p incoming credit

[stiwari 2]

New Year may make cheap calling.

TRAI indicates that mobile termination charges could be 13 paise a minute compared with 30 paise now

Carriage charges can be as low as 16 paise for each minute compared with 65 paise now

New Delhi, Dec 31

If the telecom regulator’s proposal to bring down various charges payable between operators goes through, mobile tariffs could come down by 20-30 per cent in the New Year.

In a consultation paper issued to review the interconnection usage charges (IUC), the Telecom Regulatory Authority of India has indicated that mobile termination charges could be as low as 13 paise a minute compared to the existing rate of 30 paise a minute. Termination charges are paid by the operators on whose network the call originates to the operator on whose network the call ends.

This means that if a mobile user is currently paying Re 1 per minute for making a local call, he may be able to make the same call at 80 paise a minute.

Mobile users could get further discounts on long distance calls as the regulator has also proposed to reduce the ceiling charges for carriage from the current level of 65 paise a minute. TRAI said that carriage charges can be as low as 16 paise for each minute. Carriage charges are paid by cellular and fixed line service providers to long distance telephone operators.

New players may gain

New players stand to gain if the proposals go through as their pay out in the form of termination charges to existing players will come down substantially. This is expected to be passed on to the subscribers.

Mr Rajiv Mehrotra, Chairman, Shyam Group, said, “TRAI should bring the mobile termination rates to 9 paise a minute. If these charges are lowered then local calls rates will come down to lower than 50 paise a minute.” Shyam is one of the new players, which has partnered with Russian conglomerate Sistema to offer CDMA based mobile services across the country. Other new players include Swan Telecom, Unitech, Datacom and Loop Telecom.

Existing CDMA based mobile operators said that a reduction in termination charges will bring down tariffs. Both Reliance Communication and Tata Teleservices are practically new players in the GSM segment and could gain if the regulator decides on a lower charge.

Mr S.C. Khanna, Secretary General, Association of Unified Telecom Service Providers of India, said, “A reduction in termination rates will encourage new players. It will also benefit the customers as the new operators will be able to offer tariffs that are substantially lower than the existing charges.”

Revenue loss

However, pan-Indian GSM operators who have a large customer base, will stand to lose on revenues earned from collecting the termination fee. “If international methods are adopted then it would not come down to the levels as is being proposed by the regulator,” said a Cellular Operators Association of India executive.

Going by the division in the industry over the proposal, the telecom regulator will have to do a balancing act.

While TRAI has indicated a lower charge for both carriage and termination charges, the regulator has also given a higher value in the consultation paper.

For example in the case of mobile termination charges, the TRAI has indicated that it could be 28 paise a minute in which case there will be no impact on the tariffs at all. TRAI said that the proposed charges are only indicative.

“The preliminary estimates of ranges in termination and carriage charges are only indicative as the Authority would make appropriate analysis after the methodology and various inputs going into the methodology are firmed up,” TRAI said in a release.

A final decision is expected by March 31, 2009 after taking inputs from the industry. Fixed line subscribers could also benefit as the regulator has indicated that the termination charges for fixed line services could also come down to 19 paise a minute from 30 paise.

But such a move will impact state owned BSNL’s revenues since it will receive lower charges from private operators who terminate their call to any of the PSU’s 35 million fixed line telephone users.

[Asit 4]

We are already discussing the same in http://www.rimweb.in/forums/index.php?showtopic=13904.

So, before posting a topic, u r requested to have a search for the same.

Mods plz merge it with the existing one.