India Broadband Forum

Rameshjeee

Telecom tariffs set to fall in 2009

Come 2009, telecom tariffs are set to fall significantly! Sector regulator TRAI on Wednesday set the ball rolling for lower tariffs by seeking the industry's views on reducing the interconnect charges (IUC).

Since IUC charges constitute a significant amount of the call charges, any reduction in this will reflect in a direct fall in tariffs. Telecom minister A Raja had earlier told that a reduction in IUC tariffs coupled with increased competition with the entry of several new players could lead to local call tariffs being as low as 10 paise per minute and STD at about 25-35 paise per minute by 2010.

Inetrconnect Usage Charges are those charges that are payable by one telecom operator to the others for use of their networks either for origination, termination or carriage of a call. Inter operator calls constitute a major part of the total calls handled by the telecommunications network. These charges are important as they can transfer network costs between operators and thus affect their relative scale and prosperity.

IUC charges can be best illustrated as follows:
If a Bharti Airtel customer were to make a call to a Vodafone user, the latter can charge up to 30 paise per minute for terminating the call on its network. Similarly, if the same call were to be carried on the optic cable fibre of say BSNL, the state-owned telco can charge a maximum of 72 paise per minute for carrying the call. Therefore, a significant amount that a customer pays for a mobile call is constituted by IUC charges.

The current regime is as follows:
Mobile termination charge ranges from Rs 0.13 to Rs 0.30 per minute.
Fixed termination charge varies from Rs 0.19 to Rs 0.28 minute.
Average Carriage Charges per minute after considering the cost in respect of all NLDOs ranges from Rs 0.16 to Rs 0.72 per minute.

These charges were fixed way back in 2002-03 and have not been reviewed since then, even as the overall call tariffs have by over 300% during the same time period.

The regulator will announce a reduction in IUC charges after it receives inputs from the industry.

In addition to lower tariffs, a reduction in IUC charges will also enable several of the new players who were granted telecom licences earlier this year to reduce their operational costs when they launch services. New entrants and some of the existing operators have been demanding a reduction in IUC tariffs for a long time.

Establishment of IUC is therefore an activity of far reaching consequences for the telecommunications sector. It enables competition, welfare of customers and sustained growth of telecom and development of the country. It determines revenue accruals and its dispersal among networks and services and promotes their development in correct measure.

Jaganathsamal

Its a good news.

scorpio

I am not worrying about phone. I am worrying about Broadband, the biggest problem of we users.

Plz post the latest info of broadband announcement by BSNL in 2009. Keep up with ur work

shirish

Good news, but you missed an important point. There was also a point made by Mr. Raja that we should have Rs. 3/- for termination calls which come to India from abroad as our calls are terminated there for that amount while we terminate their calls for 30 paise.

This, if it can be done would be great as what it is saying that they (the west) is protecting their industry by having such high termination charges.

saurav_k

i agree ... i also hope Broadband gets cheaper ... i am planning to move to a high speed unlimited plan but they are really very costly now ...

telecom tariff slashes are always welcome

simsandy43

Gr8 words Sir, Thankyou
Sholuld be good for all indian public

Gary4gar

wow...so cheap!

Competion rocks, consumer is the king here

prasannaganesh

Good info.

cool_techie_tvm

Came across in some threads that BSNL is going to introduce something really big by April 2009 on Broadband sector...keeping my fingers crossed for the same

fdserty

Abusolutely, it's a good news.

Gary4gar

I wish same thing, if not a rate cut.

they should increase monthly free bandwidth by atleast 20% every year.

saurav_k

why do you only expect increase in free bandwidth ... why not for unlimited usage

panchabhut

voice tariff and internet tariff are completely different issues. while we should expect somereduction in voice tariff, there appears no hope for reduction in data tariff in the near future.