Telecom rates set to come down

Telephone bills are all set to come down as the Telecom Regulatory Authority of India (TRAI) is reviewinging the interconnect usage charges (IUC).

Interconnect charges form a large part of the telephone bill and its reduction will directly benefit customers.

These carges are payable by one telecom operator to others for using their networks either for origination, termination or carriage of a call.

Inter-operator calls constitute a major part of the total calls handled by telecommunications networks.

These charges are important as they can transfer network costs between operators and thus affect their relative scale and profitability.

Cost-based interconect charges promote competition among operators and reduce network duplication.

TRAI wants to ensure that the current method of calculating interconnect charges should not affect telecom by service providers' ability to introduce innovative tariff plans.

It said in statement, "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. "

Telecom minister A. Raja had earlier said a reduction in the interconect charge along with greater competition could lead to tariffs falling to as low as 10 paise per minute for local calls and 25-35 paise per minute for national long-distance calls by 2010.

At present, mobile termination charges are between 13 and 30 paise per minute; landline termination fees are  between19 and 28 paise per minute and carriage charges, or roaming costs, are at between 16 and 72 paise per minute. The reduction in these charges may result in lower custmer tariffs by 20-30 per cent.

New telecom operators, who have yet to start offering mobile services, had opposed the termination charge of 30 paise a minute and had demanded that it should be lowered to a maximum ceiling of 10 paise.

A number of factors had gone into fixing the interconect charges and TRAI now ants to examine the effects of this charge on competition, growth of subscribers, reduction in tariff, and the actual cost of providing services.