Lok Sabha Question No. 4196 (UNSTARRED), answered on 2018-03-21
Subject: International Incoming Call Termination Rates
Ministry: COMMUNICATIONS
Asked by: ELUMALAI VELLAIGOUNDER

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO.4196 TO BE ANSWERED ON 21 ST     MARCH, 2018

## INTERNATIONAL INCOMING CALL TERMINATION RATES

4196. SHRI V. ELUMALAI:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the Telecom Regulatory Authority of India (TRAI) has slashed international incoming call  termination  rates  to  30  paise  from  53  paise  and  if  so,  the  details  thereof  and  the  reasons therefor;
- (b) whether the industry body Cellular Operators Association of India (COAI) has opined that the decision will lead to an annual revenue loss of Rs.2,000 crore which Indian telecom operators earn from foreign telecom service providers; and
- (c) if so, the details thereof and the reasons therefor?

## ANSWER

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## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

- (a) In  order  to  review  Interconnection  Usage  Charges, TRAI  had  issued  a Consultation  Paper (CP)  on  "Review  of  Interconnection  Usage  Charges"  on  05.08.2016  wherein,  inter-alia,  issues related  to  "International  Termination  Charges"  were raised for  consultation  with  stakeholders. The Authority has conducted an Open House Discussion (OHD) on 20.07.2017 in New Delhi, which was attended  by  many  stakeholders.  In  order  to  give  more  deliberation  on  the  issue  of  International Termination  charges,  the  Authority  also  conducted  a  Workshop  on  "Review  of  International Termination  Charges"  on  16.10.2017  in  New  Delhi.  The Workshop  was  attended  by  International Long Distance Operators (ILDOs) who carry voice traffic to/from India and Access Service Providers.

After  examining  comments  of  stakeholders  and  due  deliberations,  TRAI  has  issued  "The Telecommunication Interconnection Usage Charges (Fourteenth Amendment) Regulation, 2018" (2 of  2018)  on  12.01.2018,  which  came  into  force  w.e.f.  01.02.2018.  Through  this  Regulation,  the Authority has reduced the termination charges payable by an Indian ILDO to the access provider in whose network the call terminates from Rs.0.53 (paise fifty three only) per minute to Rs.0.30 (paise thirty only) per minute.

- (b) Cellular Operators Association of India (COAI) vide its letter dated 25.01.2018 has inter-alia opined that the reduction in the International Termination Charges (ITC) would result in an estimated loss of Rs.2000 crore per annum to the TSPs.
- (c) The reasons for the Authority to arrive at such a decision are explained in Para 36 & 37 of the Explanatory  Memorandum  (EM)  to the  Regulation  (Extracts  attached).  Full  text  of  the  Regulation alongwith the EM is available on TRAI website i.e. www.trai.gov.in.

## Extracts  of  the  Explanatory  Memorandum  to  "The  Telecommunication  Interconnection Usage Charges (14 th  Amendment) Regulation, 2018" dated 12.01.2018

- "36.   Owing to the twin facts viz. - (a) menace of grey route poses serious security threat to the country apart from causing significant leakage in the revenue accruable to the country and its TSPs, and, (b) proliferation of OTT route for the carrying international voice traffic has many non-cost factors, the  Authority  is  of  the  view  that,  while  deciding  on  the  appropriate  level  of  ITC  in  the  country, curbing the menace of grey route should be a more important regulatory priority than facilitating the shift of the international incoming traffic from OTT route to carrier route.
37.     Essentially,  the  players  engaged in carrying international incoming voice traffic to India through grey route thrive on the significant arbitrage opportunity presently available between the ITC, on one hand, and, tariff for domestic voice call in India plus the cost of running illegal VoIP Gateway, on the other. At present, while ITC is Rs.0.53 per minute, the average tariff for voice call 1 is about Rs.0.23 per minute in the country. Besides, there would be certain cost, albeit small, for running an illegal  VoIP Gateway. It is expected that if the arbitrage opportunity is plugged or kept to a minimum,  the  attractiveness  of  the  grey  route  for  carrying  international  incoming  voice  traffic would  be  lost,  and  thereby,  the  carrier  route  for  international  incoming  traffic  would  witness  a legitimate growth. This would not only plug the leakages in the revenue accruable to the country and  Indian  TSPs,  but  would  also  ensure  that  India  continues  to  earn  precious  Forex  from  the International incoming voice traffic business. Accordingly, keeping in view the comments of the stakeholders  and  the  foregoing  analysis,  the  Authority  has  decided  to  revise  the  termination charge for international incoming call to wireline and wireless from Rs.0.53 per minute to Rs.0.30 per minute. The Authority is of the view that, with this revision, the arbitrage opportunity between ITC and domestic call tariffs would become so insignificant that illegal VOIP Gateway business in India would become unviable; in turn, the grey market for ILD incoming traffic would eventually cease to exist."

1 As  per  TRAI's  Report  titled  'The  Indian  Telecom  Service  Performance  Indicators  (JulySeptember, 2017), the average subscriber outgo per outgoing minute from Home Service Area (HSA) for GSM and LTE Services in Quarter Ending September, 2017 was Rs.0.23 per minute.

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