TRAI cuts ISD incoming call termination charge to 30 paise/minute

TRAI cuts ISD incoming call termination charge to 30 paise/minute

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.

The new rate comes into effect from February 1.

Adding to the woes of the embattled telecom sector, the telecom regulator may cut global call termination or interconnect usage charges by half.

"The Authority is of the view that, while deciding on the appropriate level of ITC [international termination charge] in the country, curbing the menace of grey route should be a more important regulatory priority than facilitating the shift of the global incoming traffic from OTT [over-the-top] route to carrier route", TRAI said.

The move is expected to hit hard the top three telecom players - Bharti Airtel, Vodafone, Idea Cellular - who are estimated to together generate revenues of about Rs 5,000 crore from incoming worldwide calls.

The move follows a steep reduction of the domestic Interconnection Usage Charge from 14 paise per minute to 6 paise, effective from October 2017. "It is expected that if the arbitrage opportunity is plugged or kept to a minimum, the attractiveness of the grey route for carrying worldwide incoming voice traffic would be lost, and thereby, the carrier route for global incoming traffic would witness a legitimate growth".

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In a background note, it mentioned the existence of grey market which routes the ISD calls made to India by setting up illegal VoIP (voice over internet protocol) gateways which needs to curbed.

Indian telecom operators are already going through severe financial issues, and this move will further increase their woes. Back in February 2015, TRAI increased the ITC to 53 paise per minute from 40 paise per minute.

The issue had formed a part of the consultation paper on Interconnection Usage Charges or IUC but was carved out for separate deliberations by the regulator.

These rates are paid by foreign carriers for terminating worldwide calls in India.

"Incumbent revenue from global 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. "It is important to rationalise the termination rates in light of the investments made by operators into networks, together with reasonable return on those investments, amid a southward movement in tariff", Singhal added.

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