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COAI seek sharp hike in fee for linking international calls

Cellular operators' association of India (COAI) has come out in favour of a sharp increase in international termination charges so that the amount that Indian telecom companies get for incoming calls matches what foreign telcos charge them for outgoing calls that end on overseas networks.

Mail Today Bureau   New Delhi     Last Updated: October 16, 2017  | 09:26 IST
Telcos seek hike in fee for linking international calls

Cellular operators' association of India (COAI) has come out in favour of a sharp increase in international termination charges so that the amount that Indian telecom companies get for incoming calls matches what foreign telcos charge them for outgoing calls that end on overseas networks.

"Today, there is a 20:1 imbalance between incoming and outgoing international calls.
In order to adjust the imbalance, you need to go to Rs 3.50 on a weighted average basis, to correct the arbitrage," COAI Director General Rajan Mathews told Mail Today. Currently Indian companies are getting only 53 paise per minute from foreign telcos on incoming overseas calls, he pointed out. The Telecom Regulatory Authority of India (Trai) is currently in the midst of reviewing these rates, paid by foreign telecom players for terminating international calls in India.

COAI has argued there is a need to bridge the gap between blended termination rate paid by Indian operators for outgoing international calls and the termination rates received by them on international incoming calls. Mathews said there is a difference between termination charge complexities that come into play for domestic and international calls.

International interconnect rates are not as simple as domestic because there are multiple countries with their own regulatory processes and they set their own rates and also there are currency fluctuations to deal with, he added.

The blended termination rate paid by Indian operators is around Rs 3.50 a minute for outgoing international calls compared to 53 paise per minute termination rate received by them on incoming international calls, COAI has contended. Therefore, we are saying that our operators are at a disadvantage because we end up paying precious foreign exchange out.

The problem with international is that (Indian) regulator has no control on the other side (for outgoing call termination charges) so other side is free to charge whatever they want, he explained. Trai plans to come out with a separate regulation on the international termination charges. The issue had formed a part of the consultation paper on Interconnection Usage Charges or IUC but will be taken up separately for discussion by the regulator.

The move on the part of Indian telcos comes close on the heels of Trai decision to more than halve the domestic interconnect usage charge (IUC) from 14 paise to six paise per minute with effect from October 1 despite stiff opposition from older telcos such as Airtel, Vodafone and Idea Cellular who said the move would benefit Reliance Jio at their cost.

The older players have been claiming that the their cost of carrying incoming calls from rival telcos is 30 paise and hence IUC should have been raised so that they are able to recover their cost. Trai believes that the reduction of the IUC will benefit consumers and boost competition.

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