Mobile Call Connect Charges Slashed By Nearly 60%. How It Affects You

Cesar Mills
September 20, 2017

Mobile Termination Charges (MTC), now 14 paise, are payable by the operator whose subscriber makes a call to the operator whose subscriber receives the call, and directly impact the tariff.

TRAI announcing the new call termination charge said it will be applicable from October 1, 2017, and from January 1, 2020, it will be completely eliminated.

Domestic Termination charges are the charges payable by a Telecom Service Provider (TSP) whose subscriber originates the call, to the TSP in whose network the call terminates. Reliance Jio, which is a new entrant in the telecom space, demanded scrapping of the interconnect usage charges (IUC).

Bharti Airtel's largest single shareholder Singtel has flagged its concerns regarding the potential move of the Indian regulator to scrap interconnect usage charge (IUC) to the government, saying that any move to reduce or scrap the interconnect charge would hurt investments into the telecom sector, and would be damaging to customers.

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Reliance Jio had said in a presentation to Trai recently that telecom operators gained to the tune of Rs 1 lakh crore from IUC. At present, IUC of 14 paise is levied on call made from mobile phones. However, the older telecom players argue that costs are rising in the telecom business and a cut in interconnect charges will not make any difference to call charges.

TRAI said these charges worked as disincentive for deployment of new technology such as VoLTE and migration to IP networks by operators, where there are no interconnection charges. Jio also stated that it is of the opinion that waiving the charge will benefit consumers. "From 1st January, 2020, onwards, the termination charge for all types of domestic calls shall be zero".

The Trai's decision came via a gazette notification issued more than a year after it started the consultation process on the contentious issue, which saw a war of words between telecom companies.

"While on the one hand a lower termination charge benefits the consumer, it does not have a negative effect on the telecom operator because it is open to the operator to recover whatever cost it incurs through the retail tariffs, subject to competitive market conditions", it added.

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