CDMA operators seek reduction in mobile termination charges

CDMA operators seek reduction in mobile termination charges

New Delhi: Country’s CDMA operators association AUSPI has sought reduction of termination charges, stating that it has drastically plunged due to exponential increase in the minutes owing to manifold rise in subscriber base.

Termination charge above the actual cost leads to market distortion. Lower termination charges bridge digital divide, the association in a letter to the TRAI Chairman Nripendra Misra said.

The telecom subscriber base has increased substantially resulting into an exponential increase in minutes.

The current level of minutes has drastically brought down the cost of termination which should typically lie in between a range of Rs0.06 per minute to Rs0.11 per minute.

This cost is calculated on the basis of data for 2007-08.

The projected cost for the financial year 2009-10, would be even lower than even this as the established operators would achieve a higher capacities.

Therefore, the termination charge including license fee and spectrum fee should not be more than 10 paise per minute.

Association of Unified Telecom Services Providers of India’s (AUSPI) stand is at complete variance with that of Cellular Operators Association of India (COAI) which has sought an increase in the termination charges.

COAI the GSM operators’ body has called for a cost-based formula for mobile termination charges (MTC) which means a hike. The present MTC, which is levied by operators on other service providers for terminating calls on their network, is 30 paise per minute.

The established telecom operators, like Bharti Airtel, Vodafone-Essar and Idea Cellular, among others, are seeking a lower MTC while new licencees want a reduction.

For existing operators, a hike in MTC will mean an increase in revenue as they expect a rise in the number of calls terminated on their networks as the new operators start launching their services.

Most new operators have readied their networks and infrastructure and are set to start operations either by the end of this year or by early next year.

However, the new operators feel that hiking MTC will further burden them at a time their revenues are at the lowest levels.