Reliance & Tata’s AUSPI joins Uninor in attacking Airtel and Idea over termination charges

After Uninor, Reliance and Tata too have thrown their weight behind the telecom regulator’s proposal to examine whether 20 paise per minute is the right price for connecting a call from one network to another.

The charge, called termination or interconnect charge, is paid by one network to another when handing over a call to a subscriber on the latter’s network, to cover costs of connecting (or completing) the call.

While Bharti Airtel and Idea Cellular have opposed any move to lower the 20 paise per minute charge, Uninor had recently viciously attacked the stand claiming that the big operators are simply using calls from other networks to subsidize their operations.

Uninor had pointed out that while Airtel and Idea may claim that 20 paise does not cover their expenses involved in completing an incoming call to one of their customers, they sometimes offer call rates (including originating, carriage and terminating charges) that are lower than that to own customers.

The Association of Unified Service Providers — former CDMA operators Reliance Communications and Tata Teleservices — have now joined Uninor in attacking the stand taken by Airtel and Idea.

The AUSPI too highlighted the discrepancy between Idea and Airtel’s claim that 20 paise is not enough to cover terminating expenses and their own offers to their customers offering cheaper calls on their own networks (on-net calls) .

“Being incumbent operators, Vodafone Essar and Bharti Airtel are ardently favoring the current regime which distorts competition in favor of large operators by enabling them to sustain on-net — off-net prices differentials that harm the small operator and lead to traffic imbalances,” the Association wrote to the regulator today.

“Lower on-net tariffs imply a huge margin between termination cost and present mobile termination charge which makes a very strong case for significant reduction of termination charge and thus review of the existing IUC regime,” it added.

It suggested that TRAI should either remove the termination charge or keep it at 5-7 paise.

“Moving to a Bill and Keep regime with zero termination charge will foster economic efficiency by reducing service providers administrative costs as the payment of reciprocal compensation of termination charges requires that service providers incur significant administrative costs to measure, record, and bill for exchanged traffic.

“Alternatively, as per weighted average cost calculation across operators indicates that the MTC should be between 5 paisa per minute to 7 paisa per minute in the interest of consumers, industry growth and affordability,” it added.