COAI to Trai: Defer interconnect usage charge review till 17 March

In its response to Trai’s paper on IUC, COAI says the final outcome of the paper ‘may have a significant direct impact on cost structures, changes in technology and other market dynamics


Trai had fixed 17 October as deadline for receiving industry comments on the controversial discussion paper. Photo: Pradeep Gaur/Mint
Trai had fixed 17 October as deadline for receiving industry comments on the controversial discussion paper. Photo: Pradeep Gaur/Mint

New Delhi: The Cellular Operators’ Association of India (COAI) has asked the telecom regulator Telecom Regulatory Authority of India (Trai) to defer the review of interconnect usage charges—paid by one telecom operator to another for connecting phone calls—till March 2017.

In its written response to Trai’s contentious consultation paper on interconnection usage charges or IUC, the association said that the regulator has initiated various other consultations which depending upon their final outcomes “may have a significant direct impact on cost structures, changes in technology and other market dynamics.”

“It is therefore critical that the IUC review should not be held at this stage and be deferred by some months, that is, after end March 2017...By such time there will be more clarity on several issues,” COAI said in its latest submission to Trai. It further said that proposed Fixed Mobile Telephony Service of BSNL and Internet Telephony could not be trigger for initiation of the IUC consultation.

COAI, in August this year, had clashed with the regulator over IUC review terming the consultation on call connect charges as “unfair” on incumbent operators. At that time, it had also alleged that Trai’s discussion paper was an indicator of “bias creeping in”.

Trai had fixed 17 October as deadline for receiving industry comments on the controversial discussion paper. It is learnt that COAI in its comments on the Trai consultation paper has said that actual network-related costs incurred by telecom operators should be used to compute the interconnect charges, thereby batting for an increase in mobile termination charge.

When contacted, COAI director general, Rajan Mathews refused to comment on specific submission that the association has made to Trai on the IUC issue. However, sources said that the COAI, in its response, has pointed out that “all our member operators support and recommend that mobile termination charge should be determined on the cost based principle... Only Reliance Jio has a divergent view that ‘Bill and Keep’ approach should be adopted for determining the MTC.”

The cost-based model includes network operating costs, overhead costs, spectrum costs and capital costs, and these, according to COAI, should form the basis of determining the mobile termination charge. The mobile termination charge is currently pegged at 14 paise per minute, and a cost-based model would imply an increase in termination charges.

“We believe that an IUC or MTC (mobile termination charge) exercise when conducted should be based on a comprehensive costing review...the results of 2014, 2015 spectrum auctions were not factored in by the authority in 2015 calculation,” the COAI submission said.

READ MORE