Call termination charge: Ambanis spar with Mittal, Birla, others

Mukesh Ambani-led Reliance Jio, Anil Ambani-promoted RCom and Videocon have asked the regulator to abolish call termination charge, arguing that it makes phone call rates expensive for consumers and advent of new technologies are reducing cost of operations.

By: PTI | New Delhi | Published:October 18, 2016 11:27 pm
bharti airtel, idea cellular, vodafone, call termination charges, anil ambani, jio, tech news, spectrum news, techie, indian express, Mukesh Ambani. (File Photo)

Sharp differences have emerged among telecom operators over call termination charges with Ambani brothers opposing the levy, while incumbents Bharti Airtel, Idea Cellular and Vodafone maintained it is needed to encourage investments mainly in rural areas.  In response to Trai’s consultation paper on review of interconnection usage charges, Mukesh Ambani-led Reliance Jio, Anil Ambani-promoted RCom and Videocon have asked the regulator to abolish call termination charge, arguing that it makes phone call rates expensive for consumers and advent of new technologies are reducing cost of operations.

“Continuance of IUC, which is only a subsidy for inefficient network, will prevent operators from moving to the newer technologies besides keeping the cost of service at a very high level which only results in higher cost to the consumer,” Reliance Jio said in its submission. On the other hand dominant players — Sunil Bharti Mittal-led Bharti Airtel, Aditya Birla group firm Idea and Indian arm of British telecom major Vodafone have favoured levying of call termination charge to encourage investments in the country specially rural area where people spend less.

“We support a cost-based termination charge, enabling all TSPs to recover the legitimate cost of the termination of a call on their network from other operators. Such a regime is essential to protect and increase network investments,” Airtel said.

Interconnection is must among telecom networks for transmitting phone calls from one network to other. At present interconnection charges (IUC) are paid by one telecom operator to another for connecting call made by its subscriber to dialled number. These charges add up to determine phone call rates.

IUC is determined based on the cost incurred by telecom operators in transmitting a call. At present, the termination charges for a mobile to mobile local and national long distance call is pegged at 14 paise per minute while the termination charges for international incoming call to wireless and wireline stands at 53 paise per minute.

“Any change from a cost based regime will adversely impact our huge investments in the rural areas and bely the promise of cost based approach on the basis of which these investments have been made,” Vodafone said. The Telecom Regulatory Authority of India (Trai) floated a consultation paper to review phone call termination charges in August following a complaint by industry body COAI against state-run BSNL’s fixed mobile telephone service. The service proposed to allow its customers make phone calls within the country using their landline connection with help of a mobile application even when they are abroad. The Cellular Operators Association of India (COAI) approached Trai against BSNL’s service alleging that the
service will bypass international termination charge (ITC) of 53 paise per minute levied on any call coming from abroad and further bypass other call termination charge by routing call from its landline network.

In a surprise move, BSNL not only favoured continuance of ITC but also said that it should be levied in US dollar terms so that rates are conveniently settled with international telecom operators.