TDSAT Directs TRAI To Rework Telecom Interconnect Charges

[kesav 127]

Further reduction in the mobile tariff by 1st Jan 2011

NEW DELHI: Telecom tribunal today directed sectoral regulator to work out "afresh" network interconnection and call termination charges in consultations with all service providers.

A telecom company pays Interconnect Usage Charges (IUC) and Mobile Termination Charges (MTC) to other operators for connecting and completing its calls on their networks.

The Telecom Disputes Settlement and (TDSAT) remanded the disputed regulation back to TRAI, in which private operators and government-controlled have opposed IUC and MTC fixed by the regulator.

The tribunal also directed Telecom Regulatory Authority of India (TRAI) to complete the whole exercise in a time bound manner, so that the new regulation could be made effective from January 1, 2011.

"We direct TRAI to consider the matter afresh... remand the case to the TRAI with the direction that it will complete the consultation in time bound manner so that new IUC charges could be made effective by January 1, 2010," said TDSAT Chairman Justice S B Sinha in the order.

In its regulation on March 9, 2009, TRAI had reduced termination charges for all types of domestic calls such as landline to landline, landline to mobile, mobile to landline and mobile to mobile to 20 paise per minute from 30 paise per minute.

Termination charges are paid by an operator to another on whose network the call ends.

The tribunal also directed TRAI to provide adequate time to private telcom operators to respond during the consultation process.

TDSAT's order came over a bunch of petitions filed by telecom operators including Bharti Airtel , Vodafone, Idea, Reliance Communication and BSNL challenging the IUC fixed by TRAI.

BSNL had submitted that it was losing Rs 2,000 crore annually due to TRAI regulation on ICU.

The operators submitted that TRAI had formulated the IUC charges without consultation process.

source :: http://economictimes.indiatimes.com/news/news-by-industry/telecom/TDSAT-directs-TRAI-to-rework-telecom-interconnect-charges/articleshow/6653732.cms

TRAI can use this oppurtunity to further reduce the termination charges and convert IUC & MTC into per second basis instead of current per minute basis.

[Karthik R 246]

The termination charges should be fixed at 10p - 15p from the current 20p. We shouldnt pray for anything further as the network will DETERIORATE then. The call rates in India are already among the lowest in the world at less than $0.01 a minute and the Operators are under immense pressure. Such drops will be suicidal for all.

[Karthik R 246]

Had read somewhere that the Call termination charges were Rs.2 per min. in Pakistan. It was reduced to Rs.1.25 in 2008 Compare this with INDIA! :D

[HetalDP 947]

UIC MTC goes cheap Unlimited Local Unlimited STD plan will florish market but i am Concerned now for QUALITY rather then QUANTITY

[kesav 127]

It's time to revive the below topic.

[kesav 127]

Let us clear the mist about Termination Charges.

The regime of termination charge is heavily loaded in favour incumbent biggies.

Biggies cancel out each others' termination charges and earn huge amount from new players.

Biggies earn more and more when new players keep adding subscribers due to their better tariff & QoS(Quality of Service)

Net effect ::

1) New players pay huge amount to incumbents with their already squeezing wafer-thin marigin

2) Kills competition and favours oligopoly

3) It's penalty for delivering superior service

Any competitive market regulator should never support such an one-sided regime.

TRAI should make clear roadmap towards zero-termination regime to help the new players survive.

Edited September 29, 2010 by kesav

[rajanmehta 4,056]

Actually this high termination charges acts as an officially sanctioned entry barrier for new operators.

For SMS atleast, it should be zero.

[KanagaDeepan 1,084]

Let us clear the mist about Termination Charges.

The regime of termination charge is heavily loaded in favour incumbent biggies.

Biggies cancel out each others' termination charges and earn huge amount from new players.

Net effect ::

1) New players pay huge amount to incumbents with their already squeezing wafer-thin marigin

2) Kills competition and favours oligopoly

Any competitive market regulator should never support such an one-sided regime.

TRAI should make clear roadmap towards zero-termination regime to help the new players survive.

VERY VERY TRUE my friend... +1 for you..

Biggies/Baddies earn more from their incoming calls, because even if one uses Dual-SIM phones with most outgoing calls going from new operators, the BIGGIES/BADDIES are earning much more than new operators.. For example, if you call Airtel from Uninor @ 29p/min, then Airtel gets 20p from Incoming and Uninor just gets 9p from Outgoing..

IUC for Local and STD should be reduced to anything below 10p/min... Surely that will reduce total turn-over of operators, but that will only help poor new operators from dying, imho..

[Karthik R 246]

The termination charges for SMS was fixed at 10 paisa but TRAI never monitored the transactions in SMS charges which resulted in operators sending messages without paying any termination charges to each other. The business logic for operators was that SMS constitutes a major chunk of their traffic thus non-charging would negate any payment towards termination charges. This resulted in operators offering free SMS packs with mutual understanding. This started choking the networks as new entrants also started the same practice of offering free or lower SMS rates pack. Older telecos are not comfortable with new entrants utilizing similar strategy as majority of old customers reside on their network. Thus Bharti Airtel recently started charging 10 paisa as termination charges without dolling out any favors to other networks Currently a voice call is charged less than a SMS. The SMS charges ranges from 50 paisa - Rs.1 without considering any value added package plans. Thus the levying of termination charges will bring transparency to the whole messaging system at the same time see irrational telecom packages going out of market and SMS charges falling inline with calling charges. This move will hardly increase SMS charges but if TRAI interferes to bring down the SMS prices as majority of this revenues goes into operators kitty it could start a downfall in SMS charges.The operators currently earn a hefty profit through messaging as network cost is minimal in terminating messages thus they needs to bring rationality in their chtarges to benefit the subscribers

[SUDYEcaZ 67]

any possibility of termination charges being increased??

All big players will like to lobby for the same

[KanagaDeepan 1,084]

Hmmmm... Increase in IUC also possible, as

1) BSNL especially said it has lost about Rs2000 crores because of that..

2) As 3G is coming near, with COSTLIER 3G and dirt-cheap 2G tariffs means, NOT many people will shift to 3G and of-course many will use dualSIM phones or simply carry two mobiles with low usage on 3G and high usage on 2G..

3) The request for revision in IUC was given by NOT-SO-GOOD-CUSTOMER-CENTRIC-THUGS like Airtel+Vodafone+Idea+(current)RCom+BSNL and NOT new players like Docomo*Uninor*Videocon*MTS*Cheers*STel*Aircel...

But if IUC was increased, then growth rate will decrease and many cost-conscious customers will throw away their SIMs, imho.. Further tariffs like 1p/2sec will stop to exist..

Edited September 30, 2010 by KanagaDeepan

[csmart 472]

its going to go up. this way they can increase call charges which are really low. with BSNL sayin they are loosing and no new cos rolling out services in villages, even old cos, this will go up..

[SUDYEcaZ 67]

GSM cos agree to cut call-moving charges

:Riendo:

http://economictimes.indiatimes.com/news/news-by-industry/telecom/GSM-cos-agree-to-cut-call-moving-charges/articleshow/6710308.cms

[Karthik R 246]

was going to post it

[Karthik R 246]

QUOTE from the above article - ...New entrants such as Unitech, Etisalat, Sistema and Videocon said they were shocked that TRAI had cut termination charges by only 33% and added that it was "too little to create a level-playing field with existing operators". Mr Raja has since maintained that a further reduction in termination charges was vital towards ensuring his dream of consumers enjoying local calls at 10 paise/minute and STD calls at 25 paise. So far, large GSM operators had strongly opposed any further reduction in termination charges as they feared that this would further impact their revenues and profits....

[KanagaDeepan 1,084]

GSM cos agree to cut call-moving charges

:Riendo:

http://economictimes...how/6710308.cms

Currently, if an Airtel subscriber calls a Vodafone user, Airtel is liable to pay 20 paise per minute to Vodafone as termination charges. India is divided into 22 telecom circles, and calls within a circle are carried only by BSNL, which charges 15 paise per minute for it.

I am alittle bit confused here...

So 15p/min is IUC for Local calls and 20p/min is IUC for STD calls??? I have been thinking that IUC was 20p/min for Local calls and 30p/min for STD calls...

Friends please explain this to me..

Edited October 9, 2010 by KanagaDeepan

[KanagaDeepan 1,084]

Kesav bhai... Jan1 is coming near.. Do you have any update on reduction in IUC (reduces Local/STD charges) or atleast carriage fees(reduces STD and roaming charges for NEW operators)???

[kesav 127]

TRAI starts pre-consultation on the future IUC regime which will cover HSPA+,EVDO,NGN,FMC,LTE,WiMAX etc.,

http://www.trai.gov.in/WriteReadData/trai/upload/ConsultationPapers/233/consultaionpaperfndiv2410.pdf

[kesav 127]

TRAI gets four months to implement IUC regulations -- courtesy SC

The Supreme Court today directed the Telecom Regulatory Authority of India (Trai) to evolve a new set of revenue sharing norms and other regulations on interconnectivity among operators for carrying calls of one network through others.

A Bench of Chief Justice S H Kapadia asked the Trai to bring the new Interconnect Regulation on Mobile termination charges and carriage charges within four months after consulting various stake holders.

The Bench, which also included justices K S Radhakrishnan and Swatanter Kumar, asked Trai to evolve the new norms and regulations as per the directives of sectoral tribunal, Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

The apex court gave its direction on a petition by Trai challenging the TDSAT order, which had set aside on September 29 last year the Trai's Interconnection Usage Charges (Regulation), 2009 and asked the telecom regulator to bring out fresh interconnection norms and regulations in consultations with various stake holders.

The TDSAT had set aside the Trai's 2009 IUCR on a host of petition by various mobile service provider objecting to the telcom regulator's order.

The tribunal had asked Trai to consult various telecom operators in a time bound manner and finish the entire exercise by January 1, 2011.

The Trai, however, failed to bring out the new regulation within the stipulated deadline.

In its 2009 IUC regulation, Trai had fixed a mobile termination charge (MTC) at 20 paise per minute for all local and national long distance charges.

It had also raised the MTC for incoming international calls to 40 paise per minute from 30 paise, while putting a ceiling on carriage fee of 65 paise per minute for domestic long distance calls.

Trai's IUC regulation was widely opposed by the state run BSNL and private operators - Bharti, Vodafone, Idea, Aircel, Etisalat DB and CDMA lobby group AUSPI, which had filed several petitions before the TDSAT.

BSNL wanted termination charges for the fixed wire line services to be fixed by the regulator on the data supplied by it on actual cost basis.

It also wanted the MTC for incoming ISD calls to be fixed through mutual negotiation between operators. Alternatively it wanted an MTC in the range of3 to4 instead of 30 paise, which Trai had fixed.

GSM operators including Airtel and Vodafone, on the other hand, wanted an MTC of 35 paise instead of 20 paise and had requested the TDSAT to direct Trai for a fresh consultation on this issue.

Opposing all these, Trai submitted before the Supreme Court that it had fixed the MTC in such a way so that the commercial interests of the exiting big operators and small operators could be balanced.

"While establishing IUC regime,the impact on the competition, prices, quality, incentives and investment in fixed and mobile network has to be seen. The service providers need to be fairly compensated for its investments and operational expenses through IUC to drive growth of the telecom sector," Trai had said in its petition.

Trai further submitted, "Existing operators tried to preserve their market power by refusing to interconnect or making it difficult by offering interconnection at higher price or by incorporating unreasonable terms that make it difficult to a new entrant to compete."

"If these charges would have become higher then it could unnecessarily burden consumer of the interconnection seeker."

"Mobile operators who have a large subscriber base would seem to benefit from high termination charges at the cost of smaller and newer operators as the latter are net payers of large amount of termination charges as a higher proportion of their calls terminate of large mobile operators," said Trai further in its petition.

source :: http://www.business-standard.com/india/news/evolve-new-norms-for-mobile-interconnectivity-sc-to-trai/124752/on

Edited February 4, 2011 by kesav

[Honest 836]

TRAI to complete study on interconnect charge in three months

The Economic Times l 11 Feb l New Delhi

Telecom Regulator TRAI on Friday said it would come out with new interconnection usage charges payable by one operator to another for carrying phone calls of their subscribers in next three months.

"IUC (interconnect usage charge) is an ongoing process. Last IUCs were fixed in 2009. The Supreme Court has given us four months time. We expect to complete our study before that in next two to three months," TRAI Chairman J S Sarma said.

IUC are charges payable by one telecom operator to the other for use of the latter's network either for originating, terminating, transiting or carrying a call. Inter operator calls constitute a major portion of the total calls that are handled by the network.

Last week, Supreme Court had directed Telecom Regulator to evolve new norms on interconnect regulation within four months after consultation with various stakeholders in the industry.

Supreme Court has also asked TRAI to fix transit carriage charge liability on each operator. Following this order, the telecom regulator has floated tender to appoint an agency for calculating liability of transit carriage charges on individual operators.

[kesav 127]

After long time, TRAI finally releases consultation paper on IUC (Interconnection Usage Charges).

comments by 18th May, 2011.

Counter-comments by 25th May, 2011.

http://www.trai.gov.in/PR_IUC.pdf

http://www.trai.gov.in/CP_IUC.pdf

Pre-consultation comments :: http://www.trai.gov.in/ConsultationPapers_list_year.asp (click Responses received from the stakeholders on the Pre -Consultation Paper on “Review of Interconnections Usages Charges (IUC))

Let us sincerely hope at least this time TRAI will stick to its deadlines without any extensions.

TRAI must realize this issue is quite pending item and needs to be introduced at the earliest to save the new entrants which in turn saves the competition.

I hope this time pro-incumbents friendly termination charge is either abolished completely or reduced to very small value like 5p/min.

Edited April 27, 2011 by kesav

[Karthik R 246]

TRAI's latest proposals may lower call charges

NEW DELHI : Telecom regulator TRAI has fired the starting gun on radical changes in the mobile sector by proposing deep cuts in charges paid by operators to each other, a move that could lower tariffs for consumers but worsen the rancour in a deeply divided industry.

The Telecom Regulatory Authority of India on Thursday set the ball rolling on its review of so-called "interconnect charges", seeking views from mobile operators on a range of proposals that even include the possibility of doing away with call termination charges.

Interconnect charges are fees mobile operators pay one another for using their networks for originating, carrying and terminating calls. These charges, which include top rates of 20 paise a minute in termination fees and 65 paise a minute for carrying STD calls, account for as much as 75% of the total cost of a mobile call.

Kicking off its first review of these charges since 2009, TRAI said the launch of the services by new operators and the introduction of per second billing had made it "necessary to have a re-look" at these charges. It said its discussions with mobile companies revealed that some of them wanted do away with termination charges altogether and sought wider inputs on the feasibility of a "zero termination charge".

TRAI acknowledged the complaints of smaller and new operators that incumbents gained most from termination charges and sought the industry's response of having a lower slab of charges for new entrants. It said that globally, many regulators had allowed new entrants to enjoy lower termination charges to help remove barriers to competition as these players had little to offer in negotiations with incumbents.

Experts said the TRAI move was likely to divide the industry once again, with bigger, older operators with a large customer base likely to oppose the proposals, while newer entrants and those with fewer customers welcoming the changes. The incumbents and newer operators are already at daggers drawn over a raft of issues and the TRAI's latest move comes at a time the sector is in the cross-hairs of a sweeping investigation over the 2G scam.

The country's No. 1 mobile operator, Bharti Airtel, recently told TRAI that the costs of building and operating networks should be taken into account when determining termination charges and cautioned against extending "undue privileges or subsidisation" to new operators.

Another incumbent operator, Vodafone Essar, said in its submission to the regulator that interconnect charges needed to be cost- based and investment-friendly. "Adopting any methodology which does not take into account all costs, will only encourage a destructive retail price war and urban cream-skimming, which would be clearly inconsistent with the principle of sustainability."

But the Association of Unified Service Providers of India, an industry body representing firms such as Tata Teleservices and Reliance Communications , urged TRAI to cut all components of interconnect charges right away. It said internationally too, these charges are reviewed every two years and had fallen by 50% during this period.

Via : Economic times

[chitshar 25]

I think we people from rimweb should also study the consultation paper and give our comments to TRAI. And i think Hetal bhai should take the lead because if i remember correctly he gave his comments last time to TRAI(well i remember reading comments from one shri Hetal patel). May be we can run a thread for 15 days and take suggestion from all our members and then admin and moderators could compile the points and send it to TRAI on behalf of rimweb.

After long time, TRAI finally releases consultation paper on IUC (Interconnection Usage Charges).

comments by 18th May, 2011.

Counter-comments by 25th May, 2011.

http://www.trai.gov.in/PR_IUC.pdf

http://www.trai.gov.in/CP_IUC.pdf

Pre-consultation comments :: http://www.trai.gov....s_list_year.asp (click Responses received from the stakeholders on the Pre -Consultation Paper on “Review of Interconnections Usages Charges (IUC))

Let us sincerely hope at least this time TRAI will stick to its deadlines without any extensions.

TRAI must realize this issue is quite pending item and needs to be introduced at the earliest to save the new entrants which in turn saves the competition.

I hope this time pro-incumbents friendly termination charge is either abolished completely or reduced to very small value like 5p/min.

[kesav 127]

New Delhi, 29th April, 2011 – The Telecom Regulatory Authority of India (TRAI) today released an addendum to consultation paper on ‘“Review of Interconnection Usage Charges (IUC)” dated 27.04.2011. This addendum of consultation paper is available on TRAI’s website www.trai.gov.in.TRAI had taken an item “incremental cost for roaming services” into account while deciding the ceiling of national roaming tariffs in 2007. In this addendum to the consultation paper, TRAI has asked the opinion of the stakeholders whether “incremental cost for roaming services” can be excluded from the computation of the tariff ceiling for national roaming service, if the costs arising out of provision of roaming service are subsumed into the cost base taken for calculating the Interconnection Usage Charges (IUC). Stakeholders have been requested to furnish their written comments to this addendum also to the Advisor (I&FN), TRAI by 18th May, 2011. Counter-comments, if any, may be sent by 25th May, 2011. Comments and counter-comments would be posted on TRAI’s website www.trai.gov.in. The comments and counter-comments may also be sent by e-mail to jafn@trai.gov.in or trai.gov@gmail.com.

http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/824/press_release_addendum.pdf

http://www.trai.gov.in/WriteReadData/trai/upload/ConsultationPapers/252/addendum_cons_paper__29.04.11_.pdf

[chitshar 25]

I read the addendum document but its not clear to me. Is TRAI going to revise roaming rates also? someone please explain what this document actually means.