Government seeks telecom industry’s views on reducing tariffs

December 31st, 2008 - 9:42 pm ICT by IANS  

New Delhi, Dec 31 (IANS) Inddia’s telecom regulator Wednesday sought the industry’s views on reducing the interconnect usage charges (IUC), a move that may lead to a further fall in call tariffs. The Telecom Regulatory Authority of India (Trai) has issued a consultation paper to industry leaders in this regard.

IUC charges are those paid by one telecom operator to another for use of their networks for origination, termination or carriage of a call.

Since IUC charges constitute a significant amount of the call charges, any reduction in this will result in a direct fall in tariffs.

“Cost-based IUC promotes competition among operators and reduces wastage of economic resources. The regulator has to ensure that the adopted methodology should not provide regulatory hurdle and there should be ease and flexibility of introduction of innovative tariff plans by service providers,” the telecom watchdog said in a statement.

The issues that have come up for consultation include: what should be the methodology for calculation of mobile termination charges and whether the mobile termination charge should be same for all existing and new service providers and for fixed and mobile services.

According to the current regime, the mobile termination charge ranges from 13 paise to 30 paise per minute and the fixed termination charge varies from 19 paise to 28 paise per minute.

Average carriage charges per minute, after considering the cost in respect of all national long distance operators, range from 16 paise to 72 paise per minute.

These charges were fixed in 2002-03 and have not been reviewed since then, even as the overall call tariffs have been reduced by over 300 percent during the same period.

The regulator will announce a reduction in IUC charges after it receives inputs from the industry.

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