From October 1, call connect charges will be reduced to 6 paise per minute from the current 14 paise per minute.
The announcement was made by the Telecom Regulatory Authority of India (TRAI) on Tuesday, 19 September which added that from 1 January 2020, no rate will be applied.
What are call connect charges?
Call connect charges or Interconnection Usage Charges (IUC) are wholesale charges payable by a Telecom Service Provider (TSP) to another telecom service provider (TSP), for terminating or transiting/carrying a call from its network to the network of the receiving TSP. The IUC mainly consists of termination charges, origination charges and carriage/transit charges (not included in the new regulation).
Termination Charges: These are the charges payable by the originating service provider, whose subscriber originates the call, to the terminating service provider, in whose network the call terminates.
International Termination Charge: International termination charges are the charges payable by an International Long Distance Operator (ILDO), which is carrying calls from outside the country, to the access provider in the country in whose network the call terminates.
Origination Charges: The call-originating service provider pays the carriage and termination charges for the calls from the tariff collected from the consumer and retains the residual (origination charge) towards the expenses of originating the call.
In a statement released on 19 September, TRAI said mobile tariffs will fall if the operators pass on the benefit of reduced IUC charge to customers.
Key features of TRAI’s regulations on domestic termination charges
- For Mobile to Mobile, termination charge has been reduced from 14 paisa per minute to 6 paisa per minute w.e.f. 1st October, 2017.
- For other types of calls (such as wire-line to mobile, wire-line to wireline and wire-line to mobile) the termination charge would continue to remain zero.
- From 1st January, 2020 onwards the termination charge for all types of domestic calls shall be zero.
“Establishment of a clear outlook for IUC would provide regulatory predictability and enable service providers to plan their networks and businesses accordingly,” said TRAI in the notification.
Reaction of telecom operators
India’s incumbent top telcos said they will go to court against the step. Cellular Operators Association of India (COAI) Director-General Rajan Mathews called the move “disastrous”, as reported by Firstpost.
Established telecom operators have argued that every call on the network has a cost, and expenses of an incoming call on their network should be borne by the operator from whose network the call has originated.
The TRAI voiced in its notification, “The authority is of the view that in case the present regime of cost-based domestic termination charge is continued for long, it would hamper the movement of the sector towards deployment of more efficient technologies and more innovative and customer-friendly tariff offerings and, in turn, it would be detrimental to the growth.”
Read the full notification here.