New Year may make cheap calling.

Cheaper calls

TRAI indicates that mobile termination charges could be 13 paise a minute compared with 30 paise now

Carriage charges can be as low as 16 paise for each minute compared with 65 paise now

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New Delhi, Dec 31 If the telecom regulator’s proposal to bring down various charges payable between operators goes through, mobile tariffs could come down by 20-30 per cent in the New Year.

In a consultation paper issued to review the interconnection usage charges (IUC), the Telecom Regulatory Authority of India has indicated that mobile termination charges could be as low as 13 paise a minute compared to the existing rate of 30 paise a minute. Termination charges are paid by the operators on whose network the call originates to the operator on whose network the call ends.

This means that if a mobile user is currently paying Re 1 per minute for making a local call, he may be able to make the same call at 80 paise a minute.

Mobile users could get further discounts on long distance calls as the regulator has also proposed to reduce the ceiling charges for carriage from the current level of 65 paise a minute. TRAI said that carriage charges can be as low as 16 paise for each minute. Carriage charges are paid by cellular and fixed line service providers to long distance telephone operators.

New players may gain

New players stand to gain if the proposals go through as their pay out in the form of termination charges to existing players will come down substantially. This is expected to be passed on to the subscribers.

Mr Rajiv Mehrotra, Chairman, Shyam Group, said, “TRAI should bring the mobile termination rates to 9 paise a minute. If these charges are lowered then local calls rates will come down to lower than 50 paise a minute.” Shyam is one of the new players, which has partnered with Russian conglomerate Sistema to offer CDMA based mobile services across the country. Other new players include Swan Telecom, Unitech, Datacom and Loop Telecom.

Existing CDMA based mobile operators said that a reduction in termination charges will bring down tariffs. Both Reliance Communication and Tata Teleservices are practically new players in the GSM segment and could gain if the regulator decides on a lower charge.

Mr S.C. Khanna, Secretary General, Association of Unified Telecom Service Providers of India, said, “A reduction in termination rates will encourage new players. It will also benefit the customers as the new operators will be able to offer tariffs that are substantially lower than the existing charges.”

Revenue loss

However, pan-Indian GSM operators who have a large customer base, will stand to lose on revenues earned from collecting the termination fee. “If international methods are adopted then it would not come down to the levels as is being proposed by the regulator,” said a Cellular Operators Association of India executive.

Going by the division in the industry over the proposal, the telecom regulator will have to do a balancing act.

While TRAI has indicated a lower charge for both carriage and termination charges, the regulator has also given a higher value in the consultation paper.

For example in the case of mobile termination charges, the TRAI has indicated that it could be 28 paise a minute in which case there will be no impact on the tariffs at all. TRAI said that the proposed charges are only indicative.

“The preliminary estimates of ranges in termination and carriage charges are only indicative as the Authority would make appropriate analysis after the methodology and various inputs going into the methodology are firmed up,” TRAI said in a release.

A final decision is expected by March 31, 2009 after taking inputs from the industry. Fixed line subscribers could also benefit as the regulator has indicated that the termination charges for fixed line services could also come down to 19 paise a minute from 30 paise.

But such a move will impact state owned BSNL’s revenues since it will receive lower charges from private operators who terminate their call to any of the PSU’s 35 million fixed line telephone users.

Source:- HBL