INTERNATIONAL CALL TO INDIA MAY COST MORE

By March 4th, 2009 AT 6:37 PM

International or Overseas calls to India are likely to become more expensive. Four leading operators Bharti Airtel, Vodafone Essar, Idea Cellular and  Aircel met telecom regulator Trai last week, seeking approval to charge foreign telcos more for terminating overseas calls into India.
If this proposal is cleared, Indian telcos together can earn over Rs 4,000 crore annually from incoming international calls.

This proposal of the GSM telecom operators is supported by state-owned BSNL, which had earlier sought government’s approval to charge foreign operators up to ten times the current prices for incoming international calls. Indian telcos say that foreign operators, on an average, charge them about Rs 3 per minute to terminate outgoing ISD calls in their countries. But existing Indian regulations do not allow domestic players to charge foreign operators more than 30 paise per minute for bringing calls into India.

For example if a T-Mobile user in the US were to make a call to a Airtel customer in India, the latter cannot charge these foreign operators more than 30 paise per minute for terminating their calls in India.
On the other hand, foreign operators charge Indian telcos an average of about Rs 3/minute to terminate calls anywhere outside India.

India gets 3 minutes of overseas calls for every minute of ISD traffic it sends out. Telcos say the high ratio of incoming calls from other countries should be utilised to earn foreign exchange.

These telcos say that increasing termination rates for international telcos will not impact domestic consumers. They have also said that they would use these additional revenues to lower ISD tariffs for domestic consumers in India.
While BSNL the state-owned telco also has been pushing TRAI for a review of the current cap of 30 paise for incoming international calls. BSNL says that lifting these caps will compensate Indian telcos and enable them to have parity with their foreign counterparts.

The present regulatory regime in India has resulted in drastic reduction in revenue from incoming international calls whereas there is significant increase in the outflow of revenue to other countries, as foreign telecom operators have not reduced their termination charges because of the favourable and protective regulatory regime in those countries.

 

This has not only adversely affected the financial viability of telecom service providers in India but has also deprived the country of the valuable foreign exchange to the tune of Rs 4,000-5,000 crore per annum.

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