Trai Mulls Asymmetric Inter-operator Charges

[ravi_patent 28]

http://economictimes.indiatimes.com/News/N...how/4227890.cms

In a bid to create a level-playing field for new entrants such as Unitech (Telenor), Datacom, S Tel, Loop and Swan,

telecom

regulator TRAI is examining the option of specifying that

these players pay lower inter-operator charges such as carriage fees, port charges and termination charges.

In technical terms, this implies that India may move to an ‘asymmetric regime’, where telcos pay different amounts to each other for carrying and terminating mobile calls. The logic behind such a model is based on the fact that existing telcos started operations at different times, are at different stages of setting up their networks and therefore, the cost of providing interconnection services vary considerably between operators.

Currently, all these charges have been fixed by the regulator and are uniform across all telcos. But telcos can enter into mutual agreements where they offer lower rates to each other.

For instance, new players such as Swan or Unitech will have to pay upto 30 paise per minute to Bharti as termination charges if its subscriber calls an Airtel user. Similarly, since these new players are unlikely to have nation-wide infrastructure to carry their calls, they will have to pay 60 paise a minute to existing operators as carriage fee for using their network.

New entrants say these charges were specified in 2003 and most telcos have already recovered the cost of building their networks. They want Trai to revise these charges and make them cost-based (the actual cost it takes to carry or terminate calls).

The ‘asymmetric regime’ model has been adopted by several countries, including the UK, Switzerland, Germany, France and Italy, to offer a level-playing field to new players. Globally, this model has been used as a temporary option for a period determined by the regulators to enable new players to gain a fair market share and compete with established telcos.

But existing operators such as Bharti, Vodafone, Idea and Aircel are all opposed to changing the current model. These telcos say India already enjoys the lowest tariffs in the world, and operators often recover their heavy investments in rural expansion from termination and carriage charges.

"With higher costs and lower revenue potential, the economics of extending coverage (to rural areas) has become increasingly challenging. A reduction of even one paisa would be a retrograde step towards the goal of bridging the digital divide," the telcos said in a joint statement.