Trai proposes roaming rate cut; telcos wary

Regulator says revision of roaming charge cap will help cut rates by 35%; telecom firms fear revenue loss

Telecom Regulatory Authority of India (Trai) on Friday proposed slashing roaming call charges by around 35% and SMSes by 80%.

Trai proposes to do this by revising downwards the current ceiling on roaming charges. In doing so, the regulator aims at completing the exercise it undertook recently by revising downwaTraird the termination charges and carriage charges. Since the cost of the operators would come down, so the next logical step was to lower roaming rates .

Trai has proposed cut in outgoing local calls to mobile and landline and roaming outside home network from a ceiling rate of Re 1 to Re 0.65 a minute. Similarly, the regulator has proposed decrease in ceiling rates for outgoing STD calls to mobile and landline while roaming to Re 1, from the current Rs 1.50 per minute.

The regulator has also proposed a ceiling of Re 0.45 per minute from Re 0.75 being charged by telcos for incoming local and STD calls while subscriber are on roaming outside their home network.

Mobile-roaming

For short message services (SMS), Trai has proposed cut with a ceiling of Re 0.20 per SMS for outgoing local SMS and Re 0.25 for STD SMS. The current slabs Re 1.50 per SMS for sending SMS to local or STD mobile phone numbers.

The telecom industry, which is required to respond to Trai recommendations by March 13, is peeved. According to it, the move takes away  the flexibility it has to fix roaming charges. While the current slabs are ceiling rates as part of tariff packages, the actual roaming charges get lower.

Further, with the upcoming auctions, it removes the elbow room the industry has to raise tariffs to recoup its high bidding amount.

Currently, the annual mobile revenues of the industry stands at around Rs 1 lakh crore and national roaming contributes around 5-6% to it, which would now get hit.

Director General of Cellular Operators Association of India Rajan S Mathews told FE that if Trai’s proposal is implemented, it would badly impact the profitability of the telecom companies.

“Such a massive cut in roaming tariffs as proposed by Trai is not easy to swallow. Trai had this week also reduced domestic carriage charge.

This, too, will have an impact on our revenues. We are reviewing the impact such cut would have on our revenues. Telecom companies will give feedback to Trai,” he explained.

Roaming charges were last reviewed in September 2013.

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