In what is good news for smaller telecom players,the Telecom Regulatory Authority of India (TRAI) has announced to lower termination charge for short messaging services to 2 paise per SMS for retail consumers and 5 paise for commercial messages.
This decision is the first by the regulator on SMS termination charges. Hitherto it had left it to the market to determine the rates. The market-determined rates,currently,are in the range of 10 paise per SMS. The new charges will be applicable from June 1,2013.
Termination charge is a fee paid by the operator on whose network the SMS originates to the operator on whose network the message is delivered.
Even as the smaller players are set to gain with the lowering of charges,bigger operators stand to lose because the number of SMS coming into their network is much more than what goes out.
By keeping the termination charge for commercial messages at 5 paise per SMS,TRAI is expecting the number of unsolicited messages to come down. TRAI,in a release,said that not deciding on charges has worked satisfactorily in the past when the use of SMS by the subscriber was limited but a decision is required to be taken now.
Due to exponential increase in the number of commercial SMS,large imbalance in SMS traffic between the networks of interconnecting service providers,unilateral imposition of termination charge and in case of non agreement,disconnection… and growing litigations… the Authority… prescribed cost based SMS termination charge, the release.
Vodafone,however,feels that lowering termination charge is not going to make or break their business. India is not like other countries where terminations charges are very high. Even with 10 paise per SMS,it is very low and reducing its further is not going to make or break our business, Vodafone India MD and CEO Marten Pieters told The Indian Express in an interview recently.