The Hindu : Front Page : DoT asks TRAI to cut mobile termination charges

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Tuesday, Jun 24, 2008
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DoT asks TRAI to cut mobile termination charges

Sandeep Joshi

NEW DELHI: The Department of Telecommunications has asked the Telecom Regulatory Authority of India to review mobile termination charges due to the spurt in connections and network expansions.

Reduction in termination charges would further bring down mobile tariffs.

The termination charge, paid by an operator from whose network a call originates to a service provider on whose network the call terminates, is a function of traffic and such increase in traffic must translate into reduction in termination charges, said DoT in a letter to TRAI.

Now, the charges fixed in 2003 were 30 paise a minute and considered too high. Since then the cost of network and services has come down by more than 50 per cent.

The letter suggested a review of the mobile termination charges, based on present and projected cost and traffic.

“One of the major component of tariff is the termination charge, which is not under forbearance [not decided by market forces]. The high termination charges might stifle competition and disturb the level playing field.

“The argument that if mobile termination charges are reduced, the viability and the sustainability of existing tariff plans may not be possible and may retard growth of mobile subscribers, should not be the reason for not reviewing it. Rather, it will lead to reduction in pay outs of the operators making the tariffs more viable and sustainable in the competitive environment.”

It said while reviewing the spot values of access deficit charge and the carriage costs, TRAI had not carried out a detailed cost and traffic exercise for reviewing the termination charges for mobile as well as basic services. Higher termination charges in other countries cannot be a reason for the customers to pay more, the DoT said.

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