The department of telecommunications (DoT) has asked the Telecom Regulatory Authority of India (Trai) to review the termination charges and make them cost-based. In a letter written to the regulator, DoT has said that the current termination charge of Rs 0.30 per minute was last reviewed in 2003 and if brought down would lead to even further lower tariffs.
The DoT has suggested that the ceiling on the ?termination? charges be brought down to Rs 0.10 per minute and cited the reduction in costs and increase in the traffic as the primary reasons of doing so.
However, when contacted, Trai chairman Nripendra Misra told FE that so far he was not aware of any such letter.
The service provider from whose network the call originates pays termination charges, to the service provider on whose network the call ends. For instance, a user if dials a number from a Vodafone number to an Airtel number then the former would have to pay a termination charge to the latter.
The DoT has also asked Trai to review the reduction in the termination charges on a priority basis. Making the termination more cost-base and in tandem with the current market conditions, the DoT has said that the termination charges are a function of traffic and a high increase in traffic must translate into reduction in the termination charges. BSNL had represented to the DoT that less cost and increase in the traffic justify a downward revision of the mobile termination charges and suggested the reduction of ceiling to Rs 0.10.
Trai had fixed termination charges for both fixed and mobile services at the same rate of Rs 0.30 in 2003 on the basis of the cost data of a couple of years submitted by various service providers then. The DoT felt that much had changed since then; competition had increased, traffic had multiplied several times and investments in infrastructure were also being ramped up. All of which make a strong case for reduction in the ceiling.
The DoT has noted that, the argument that if mobile termination charges are brought down, then the viability and the sustainability of the current tariff plans may not be possible and this may retard the growth of mobile subscribers, does not seem to be a valid reason for not reviewing it in the general interest of the public at large and telecom consumers in particular.
?Rather, 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 DoT said.