National

TRAI yet to review charges for fixed and mobile services

NEW DELHI: Five years after the Telecom Regulatory Authority of India prescribed call termination charges for fixed and mobile services, it is yet to review the charges.

The result: call charges remain relatively high. The fall out: Union Communications and Information Technology Minister A.Raja’s plans to steeply reduce telephone call charges have not materialised. Mr.Raja has made it his goal to reduce call charges to less than 30 paise per minute.

TRAI prescribed termination charges for fixed and mobile services through its regulations on October 29, 2003. This was done on the basis of cost data submitted by various service providers for the years preceding it. In its principal regulation note issued on that date, TRAI came to the conclusion that the termination charges for cellular mobile comes to about Rs.0.26 per minute for metros and Rs.0.30 per minute for circles as against the prescribed level of Rs.0.30 per minute.

The DoT and the Telecom Ministry have repeatedly pressed for a revision ever since Mr. Raja assumed office in May 2007. In the last letter written to the Secretary, TRAI, in June 2008, on the subject ‘review of mobile termination charges based on present and projected cost and traffic,’ Sashi Mohan, Director (AS-IV), said: “Given the central aim of the NTP’99 to provide telecommunication services at affordable rates; given the unprecedented expansion of telecom services that competition has brought about with steep reduction in tariffs due to reduction in costs of providing telecommunication services and given the fact that provision of such services at the cheapest possible rates and by the most reliable mode is the sine qua non for India to consolidate its position as a leading hub of communication systems and in the public interest in general and the consumer interest in particular and for the proper conduct of telegraphs and telecommunication services, the undersigned is directed to suggest that a review of the mobile termination charges, based on present and projected cost and traffic, is undertaken by TRAI on priority in a time bound manner."

Four months on, the DoT is still awaiting a reply from TRAI, top officials said.

Going by the records available with The Hindu, it appears that TRAI has not been in favour of further reduction in charges, regardless of the massive volume growth in mobile telephony.

In annexure 1 of the extracts of para 58 and 59 of the explanatory memorandum of regulation dated October 29, 2003, the TRAI notes that “Due to increased volume of traffic it is likely that the termination charges especially for mobile services may come down. The Authority has also estimated and found that mobile termination charges as well as fixed termination charges could be lower than the present specified level of Rs.0.3 per minute. In spite of this, the Authority did not reduce the mobile termination charges and fixed termination charges … ,” it said and lists possible service deterioration, low termination charges in India, lower coverage area in India and anxiety over viability of tariff plan among the reasons not to press for lower termination charges.

Though the Telecom Ministry had argued earlier that the current level of rates is among the lowest in the world, Mr.Raja’s team believes that this is not true. “This [the rate here] has to be seen in the light of India’s low cost economy and low per capita income. The prices cannot be compared in U.S. dollars and need to be compared in terms of purchasing power parity. It has to be kept in mind that to bring lot of foreign direct investment, which can generate a lot of employment, we need to reduce the cost of services in the country. The telecom sector has the potential to further bring down its prices, thus cutting down the cost of the entire industry,” a DoT official said.

Rs.0.20 per minute is the price that one would have paid per minute if the TRAI had reviewed the rates earlier, he added.

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