New mobile players call for termination rate decrease

5 Mar 2009

New mobile operators including Swan Telecom, Unitech Wireless, Datacom and Loop Telecom, as well as established cellco Reliance Communications (RCOM), have asked the Telecoms Regulatory Authority of India (TRAI) to reduce mobile termination rates, India’s Economic Times reports. Existing GSM-based operators however have objected to the plans and called for the INR0.3 (USD0.006) per minute charge to be retained. Putting their case for the fee decrease forward the new players said in a statement, ‘The termination charge for new entrants is a cost and not revenue. The charge has a direct bearing on retail tariffs. The higher the termination charge, the higher the retail tariffs will be and therefore it is anti-consumer, besides reducing the margins and competitive ability of new entrants to match the tariffs of the established and large operators. The termination charge is around 30%-50% of the total retail tariff. The new entrants will have to match or provide lower tariffs than incumbent operators charge.’

In separate but related news it has been revealed that the TRAI is considering options to reduce other inter-operator charges, including carriage fees and port charges in a bid to level the playing field for new entrants to the wireless sector.