Call Termination Charge: Ambanis Spar With Mittal, Birla, Others

TRAI has been urged to abolish call termination charge as it makes phone calls expensive

Bharti Airtel and Vodafone favour the levy of call termination charge to encourage investments (Photo: The Quint)

Sharp differences have emerged among telecom operators over call termination charges with Ambani brothers opposing the levy, while other players like Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd maintain it is needed to encourage investments mainly in rural areas.

In response to the telecom regulator, TRAI’s consultation paper on review of interconnection usage charges, Mukesh Ambani-led Reliance Jio Infocomm Ltd, Anil Ambani-promoted Reliance Communications Ltd and Venugopal Dhoot-promoted Videocon Telecom Ltd have urged the regulator to abolish the call termination charge, arguing that it makes phone call rates expensive for consumers and the advent of new technologies are reducing cost of operations.

Continuance of IUC (Interconnection Usage Charge), 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 Statement

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 the levy of the call termination charge to encourage investments in the country, specially in rural area where people spend less.

We support a cost-based termination charge, enabling all TSPs (telecom service provider) 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.

Bharti Airtel’s Statement

Also read: COAI Wants Interconnect Usage Charge Review Deferred Till 17 March

Impact on Network Investments

(Photo: Reuters)

Interconnection is a must amongst telecom networks to transmit phone calls from one network to another. At present, interconnection charges (IUC) are paid by one telecom operator to another for connecting calls made by its subscriber to the 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 fixed lines 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 India’s Statement

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