TRAI cuts domestic call termination charges by 33%

In a move to reduce the local and STD call charges, the Telecom Regulatory Authority of India (TRAI) on Monday announced to slash the termination call charges – the charges paid by the operators on whose network a call originates to the operators on whose network the call ends – by 10 paise per minute from 30 to 20 paise per minute.

On the other hand, to strike balance and prevent the domestic telecom from heavy revenue loss, TRAI has also hiked the international incoming termination call charges by 10 paise per minute from 30 to 40 paise per minute.

However, the Global Service for Mobile Communication (GSM) players are not happy with the move of telecom watchdog as they argued that there would be a huge revenue loss to the existing GSM players because of constituting over 75% of customers of GSM technology service.

The GSM lobby of Cellular Operators Association of India (COAI) – the industry body representing GSM companies – said calculations based on international best practices show that termination charge should be 35 paise per minute. This move of TRAI would discourage the telcos to concentrate again on higher revenue generating urban areas as against constrained rural areas.

However, the new GSM players who have either entered or preparing to enter in the filed has requested the telecom regulator to further reduce the terminal prices to 9 paise per minute.

On the other hand, the Code Division Multiple Access (CDMA) operators have welcomed the move of TRAI as they have most of the low end users who receive more calls rather than dialing.

On the international termination call charges, the telcom firms are still not pleased as they said that on the international incoming calls the foreign companies levy Rs.3 per minute to Indian company that translate into Rs 2,700–crore for a total duration of 9 billion minutes while Indian firms would get only Rs.1,000-crore for 25-billion minutes at the rate of 40 paisa per minute.

All these new termination charges will be effective from April 01, 2009, TRAI announced.