The Hindu : Higher tariff for land phones mooted

Online edition of India's National Newspaper
Sunday, Jan 26, 2003

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Higher tariff for land phones mooted

By Sandeep Dikshit

NEW DELHI JAN. 25. The Telecom Regulatory Authority of India (TRAI) today caused a stir among phone users and companies alike by proposing radically revised tariffs and interconnect charges for all type of phone services.

The new rates will be applicable from April 1 provided there is political clearance soon. The unusually long gap between proposal and implementation leaves the field open for lobbying by various quarters. Cellphone users were the happiest, while fixed phone users felt dismayed. Though cell and limited mobility companies (WLL-M) said their bottom lines are bound to be severely dented, their claim can be disputed.

The TRAI has paid maximum attention to fixed phones. All categories will pay higher call charges since the pulse has been reduced, from 3 to 2 minutes, for fixed to fixed calls and to 90 seconds for fixed to cell calls.

The number of free calls has also been reduced. The hike in rentals has been waived for rural and commercial subscribers and is 11 per cent for consumers in cities and towns. A newly-created category of senior citizens will continue to pay the existing rentals. These hikes will be partly off-set by lower STD rates. International call rates have been freed from regulation and are expected to be dictated by the market.

Cell users, comprising one per cent of the population, will benefit the most. All calls to cellphones will be free and the TRAI has asked companies to waive the rental (up to Rs. 49) for free incoming cell-to-cell calls. After a vigorous fight that was carried out for three years, cell companies have won the right to collect interconnection charges for calls landing in their networks.

But they vowed to continue contesting their case against WLL (M) companies before the Telecom Dispute Tribunal. The relief to cell companies may help banks and financial institutions which had lent heavily to cell companies. However, cell companies claimed they had been shortchanged by the TRAI and felt some key issues were left unaddressed.

As is the case with cell companies, their WLL (M) counterparts were in a ``state of shock''. Reliance and Tatas cannot continue to offer the amazingly low call rates without suffering losses. This is because at present, they do not pay interconnect charges for outgoing calls and receive Rs. 1.20 per minute for all incoming calls from cell companies. This has been changed by the TRAI.

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