Telcos differ sharply on Trai move to revise interconnect rate

Telcos differ sharply on Trai move to revise interconnect rate

The Interconnect Usage Charges (IUC) form key part of tariffs plans offered to consumers.
The broad message given out by the comments offered to the consultation paper floated by the Telecom Regulatory Authority of India (Trai) is that operators who are still rolling out their infrastructure -- like Etisalat DB, Sistema Shyam, Uninor -- are opposing capex-based IUC regime.

Incumbent players, on the other hand, maintain that it will be the right way forward.
In their response to the Trai paper, they said capital expenditure made by telecom operators in their network should be taken into account while determining the new IUC regime.

"If the termination charges are not inclusive of all cost incurred, including capex (capital expenditure) and opex (operational expenditure), then it amounts to subsidisation of one operator by the other," Bharti Airtel said in its comment on IUC consultation paper.

New telecom operators were divided on the issue of factoring capex for determining IUC.

"TRAI has consistently excluded capital expenditure to estimate termination charges in earlier calculations. Thus, non-inclusion of capex would be in-line with existing policies," Sistema Shyam Teleservices commented.

Etisalat DB stated that it supports consideration of only relevant capex for calculating IUC but that it should be scientifically justified as cost relevant to call termination.

Association of Competitive Telecom Operators (ACTO) said that TRAI should not allow the operators to recover any double costs which have been already covered through any means, products or network services.

"We further recommend that operators may be allowed to recover only efficient costs under competitive environment," ACTO said.

It added that in a competitive environment as in India, prices or charges should be set on the basis of the prevailing technology.

Similarly incumbent and new telecom operators in their response to consultation paper have tried to outwit each other on many points on which views were sought by the Telecom Regulator.

The varied opinions of the two group of operators would mean a tough balancing job for Trai which also has to keep in mind the interest of consumers.

TRAI has scheduled open house discussion on May 25 on IUC consultation paper to take final views of industry.