TRAI reduces global termination rates

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The worldwide termination rate is a charge paid by global operators to local telecom networks that receive calls.

Telecom Regulatory Authority of India (TRAI) reduced worldwide call termination charges (ITC) to 30 paise from the 53 paise.

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

The new rate will be effective from February 1. The prices of global calls are expected to drop. This would not only plug the leakages in the revenue accruable to the country and Indian TSPs, but would also ensure that India continues to earn precious Forex from the global incoming voice traffic busines " the TRAi said. Indian telcos are yet to comment on this massive announcement from the regulator.

TRAI had raised the global termination charges to 53 paise per minute from 40 paise in February 2015, while cutting the mobile termination charges to 14 paise per minute from 20 paise per minute. The companies had also been seeking an increase in this charge to Re 1 and then to Rs 3.50.

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.

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"Incumbent revenue from worldwide calls terminating here will be directly and proportionally impacted by the 43% reduction in ITR", said Mritunjay Kapur, head of telecom, media and technology at KPMG India.

Airtel, Vodafone and Idea Cellular had, consistently, wanted the worldwide rate to be increased - to Re 1 initially and to Rs 3.50 later on the grounds that existing rates are very low for India when compared to global markets, which in turn hurt call volumes going out of India, and thus revenue.

"Any reduction in termination cost is going to have a major impact". An operator charges their rival an Interconnection Usage Charge when a user ends a domestic call on their network.

TRAI said the new rule "shall come into force from the 1st February, 2018".

The reduction in the charge will lower the attractiveness of the grey route for carrying worldwide incoming voice traffic and therefore carrier route for global incoming traffic would witness a legitimate growth, Trai has said while backing its move.

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