TRAI slashes fee for telcos

Come April 1, and STD and local calls from mobiles in India will become up to 20% cheaper. This is after mobile service providers follow a directive from telecom regulator Trai to slash the fee they pay each other to move calls between networks by a third.

The lower tariff will also apply to third-generation telecom services when they are launched. At present, if a Bharti Airtel subscriber calls a Vodafone user, Airtel is liable to pay 30 paise per minute to Vodafone as termination charges. Reducing it to 20 paise/minute — as directed by Trai — will lead to a direct reduction in mobile tariff.

However, calls made to India from overseas will cost a bit more (less than a cent/minute) from April, as Trai has allowed Indian telecom companies (telcos) to charge foreign operators up to 33% more for terminating overseas calls in India.

Till now, Indian rules did not allow local telcos to charge more than 30 paise per minute for bringing calls into India. Trai has now increased this to 40 paise per minute. For Indian telcos, this will mean an extra revenue of over Rs 300 crore. Trai has asked all telcos to pass on this extra earning to customers by reducing ISD tariffs.

India is divided into 22 telecom circles and calls within a circle are carried only by state-owned BSNL, which charges 20 paise per minute. The regulator has slashed this to 15 paise per minute. This would benefit private operators but will mean a loss of revenue for BSNL.

Trai has also decided not to alter the current ceiling of 65 paise per minute for carrying long-distance calls within the country. For instance, if a BPL customer in Mumbai makes a call to a mobile user in Chennai, and if BPL does not have the requisite infrastructure to carry this call, it pays up to 65 paise per minute to a third operator such as Bharti or Reliance Communications to carry this call to Chennai.