Cutting of global call termination charges may cost dear to telcos

Trai cuts ISD incoming call termination rate to 30 paise

International Incoming Call Termination Charges Cut

India's telecom regulator has reduced the global termination rate - a charge paid by worldwide operators to local networks that receive calls - to 30 paise a minute, from 53 paise a minute. The new rate will be effective from Feb 1.

Termination charge is payable to the local operator on whose network the call terminates and is paid by the global operator from whose network the call has originated.

"The Authority is of the view that, with this revision, the arbitrage opportunity between worldwide termination charge (ITC) and domestic call tariffs would become so insignificant that illegal VOIP (voice over IP) gateway business in India would become unviable; in turn, the grey market for ILD (international calls) incoming traffic would eventually cease to exist", Trai explained further.

The halving of calling charges was estimated to swipe Rs 5,000 crore in revenues from incoming global calls, a report by ET said.

This comes on the back of excessive use of data driven apps that allow subscribers to make global calls at a fraction of the cost of a voice call.

It added that the grey market, which routes worldwide calls by setting up illegal voice-over internet protocol gateways, needed to be curbed.

Trai added that the move would not only plug the leakages in the revenue accruable to the country and Indian telecom players but would also ensure that India continues to earn foreign exchange from the global incoming voice traffic business.

These rates are paid by foreign carriers for terminating global calls in India. They were, in fact, going to ask for an increase in the rates to Re 1, and then later to Rs 3.5 per minute, The Economic Times reported.

The issue had formed a part of the consultation paper on Interconnection Usage Charges or IUC but was carved out for separate deliberations by the regulator.

The number of worldwide calls made to India were comparatively lesser than those originating from the country. An operator charges their rival an Interconnection Usage Charge when a user ends a domestic call on their network. "The Authority is of the view that, with this revision, the arbitrage opportunity between ITC and domestic call tariffs would become so insignificant that illegal VOIP gateway business in India would become unviable; in turn, the grey market for ILD incoming traffic would eventually cease to exist", Trai said.

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