Trai slashes ISD incoming call termination rate to 30 paise

 Telecom regulator Trai today slashed international incoming call termination rate to 30 paise from 53 paise, mainly to curb the "grey route" and enhance revenues of Indian telecom operators.

However, industry body COAI said the decision will lead to annual revenue loss of Rs 2,000 crore which the Indian telecom operators earn from foreign service providers. "The Authority has reduced the termination charges payable by an International Long Distance Operator (ILDO) to the access provider in whose network the call terminates from Rs 0.53 per minute to Rs 0.30 per minute," Trai said in a statement.
The new rate will be effective from February 1.

Telecom firms levy termination charge on operators from whose networks calls have been made for transmitting them to the subscriber. In a background note on its decision to reduce the international termination charge (ITC), Trai said the move will reduce the attractiveness of the grey route for carrying international incoming calls and the telecom operators' network would witness legitimate growth. "This would not only plug the leakages in the revenue accruable to the country and Indian TSPs (telecom service providers), but would also ensure that India continues to earn precious forex from the international incoming voice traffic business," Trai said.

However, the Cellular Operators Association of India (COAI), whose members include Bharti Airtel, Vodafone and Idea Cellular, said the reduction in ITC "is against national interest, as the country will lose precious foreign exchange" due to a sharp decline in the rates. "The loss to Indian TSPs on account of the reduced ITC received by them from foreign carriers for incoming international calls, is expected to be approximately Rs 2,000 crore annually, and this will lead to a loss in revenue to the exchequer, from both licence fee and GST," COAI Director General Rajan S Mathews said, adding that Trai should re- examine its decision.

Established telecom operators had demanded increase in ITC as global average paid by them to foreign operators when their subscribers make calls is Rs 2.57 per minute. "The Indian telecom industry is passing through one of its toughest phases with severe financial stress, and has been seeking relief from the government. "The regulation from Trai to slash ILD termination rates from 53 paise per minute to 30 paise per minute is a body blow to an already stressed industry," Mathews said. New entrant Reliance Jio had demanded reducing ITC to the level of mobile termination call in domestic market, which has been made 6 paise per minute from October 1, 2017.
The regulator said international phone call traffic on telecom operators' networks is facing fierce competition from OTT (over-the-top) channels like WhatsApp and Skype as well as the grey route.

The regulator explained in the note that the declining trend of incoming calls on telecom operators' networks suggests that any increase in ITC from current level of 53 paise is likely to result in a further decline in international incoming voice traffic on carrier route. Trai also said the "menace of grey route poses serious security threat to the country apart from causing significant leakage in the revenue accruable to the country" and telecom operators.
"Authority is of the view that, while deciding on the appropriate level of ITC in the country, curbing the menace of grey route should be a more important regulatory priority than facilitating the shift of the international incoming traffic from OTT route to carrier route," Trai said.