TRAI intervenes in SMS interconnect battle, sets extra fee for ‘spam’

30 May 2013

The Telecom Regulatory Authority of India (TRAI) has set a cost-based SMS termination charge of INR0.02 (USD0.00036) per message, to come into force from 1 June 2013.

The TRAI noted that the determination of interconnection charges for SMS has been an option available to the regulator since the 2003, although until now it has maintained a policy of forbearance. In response to concerns that leniency over interconnection fees was allowing dominant players to exploit their position, in March 2009 the TRAI ordered that termination charges should be transparent, reciprocal and non-discriminatory. In 2011 the TRAI officially began the consultation process for the introduction of SMS interconnection fees, through which a number of providers questioned the need for such measures, except for where unsolicited ‘spam’ messages and commercial SMS are concerned. The question of discriminatory interconnection charges resurfaced in subsequent years, with certain cellcos accused of abusing dominant market positions to coerce rivals into paying higher fees.

The TRAI’s study showed that cost per SMS for six operators varied from INR0.0077 to INR0.0253, with an average cost of INR0.0185 although the elevated cost of the highest price was due to much higher than average ‘costs other than network elements.’ When this was brought in line with the typical value for the market, the cost per SMS was lowered to INR0.018. At INR0.02 per SMS, the termination fee set by the TRAI is a little over the typical cost per SMS. Responding to complaints over smaller operators selling cheap bulk SMS for telemarketing, the TRAI has set a charge of INR0.05 per SMS for transactional SMS.