DoT for review of termination charges; mobile tariffs may fall
In what could bring down mobile tariffs further, the department of telecom (DoT) has asked the Telecom Regulatory Authority of India (TRAI) to review termination charges and make them cost-based.
By ET Bureau |
NEW DELHI: In what could bring down mobile tariffs further, the department of telecom (DoT) has asked the Telecom Regulatory Authority of India (TRAI) to review termination charges and make them cost-based.
Termination charges are paid by the telecom operator, in whose network the call originates, to the operator on whose network it gets terminated. These charges, fixed in 2003, currently stand at about 30 paise/minute. DoT has asked for a review on priority basis, current call traffic and cost of network & services be taken into account to formulate revised charges.
���Given the central aim of telecom policy to provide services at affordable rates, it is suggested that a review of the mobile termination charges, based on present and projected cost and traffic is undertaken by TRAI on a priority in a time bound manner,��� the telecom department has said in its letter to TRAI. Industry players��� estimates show that cost-based termination charges would be as low as 10 paise/minute.
A senior TRAI executive said that no such letter has been received by the regulator. In its letter, DoT also noted that high termination charges could stymie competition in the telecom arena, especially when new telecom players are entering the fray.
Termination charges are paid by the telecom operator, in whose network the call originates, to the operator on whose network it gets terminated. These charges, fixed in 2003, currently stand at about 30 paise/minute. DoT has asked for a review on priority basis, current call traffic and cost of network & services be taken into account to formulate revised charges.
���Given the central aim of telecom policy to provide services at affordable rates, it is suggested that a review of the mobile termination charges, based on present and projected cost and traffic is undertaken by TRAI on a priority in a time bound manner,��� the telecom department has said in its letter to TRAI. Industry players��� estimates show that cost-based termination charges would be as low as 10 paise/minute.
A senior TRAI executive said that no such letter has been received by the regulator. In its letter, DoT also noted that high termination charges could stymie competition in the telecom arena, especially when new telecom players are entering the fray.
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���One of the major component of tariff is the termination charge, which is not under forbearance. The high termination charges have potential to stifle competition and may disturb the level playing field,��� the DoT noted. Termination charges are a function of traffic and a high increase in traffic should translate into reduction in such charges, it added.
���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 telecom department said.
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