Raja seeks cut in termination charges for lower mobile tariffs

Mobile call tariffs in India, already the lowest in the world, may come down further, as telecom minister Andimuthu Raja has suggested that termination charges that mobile phone companies pay each other for calls across networks should be reduced.

"I requested the operators, the termination charge can come down by 2010 and accordingly tariffs can be reduced," the minister told reporters after meeting with chief executives of telecom companies in New Delhi on Tuesday.

He said local call charges can come down to as low as 10 paise a minute and STD tariffs to just 25 paise per minute. But he warned operators that they must pass on the reduction by lowering tariffs.

Termination charge is the fee that operators pay each other for moving calls between their networks.

At present, if an Airtel subscriber calls a Vodafone user, Airtel is liable to pay 20 paise per minute to Vodafone as termination charges. Therefore, any cut in termination charges will result in a direct reduction in call rates.

For instance, if the termination charges are halved to 10 paise per minute, it will reduce local and long-distance tariffs by about 15 per cent.