Telcos, ILDOs Argue Over International Call Termination Revenue Sharing

Indian mobile operators sparred with independent International long-distance operators over sharing of international call termination charges (ITC)

By February 4th, 2020 AT 2:09 PM
  • Bharti Airtel and Reliance Jio argued for raising the ITC from current 30 paise per minute to 0.65-Rs 1.25
  • ILDOs want ITC shared in 60:40 between termination network, or telco and the ILDO
  • Telcos with ILD, NLD licenses opposed the proposal

Telecom operators Bharti Airtel, Reliance Jio Infocomm and Vodafone Idea sparred on Monday with ILDOs such Tata Communications and Spectra over revenue sharing of international call termination charges. In an open discussion on the issue of International Call Termination charges, Trai sought the view of stakeholders whether to continue fixed ITC regime or move on to a variable pricing mechanism. Several of the telecom operators argued for raising the ITC from current Rs 0.30 to Rs 0.65-1.25. International Long Distance Operator (ILDOs), however, said their businesses are under threat and favoured ITC to be shared in the ratio of 60:40 between terminating network, or telco and the ILDO. This move was opposed by telecom companies which hold both NLD and ILD licences.

ILDOs Urge for Revenue Sharing Model

ILDOs are international telecom licensees responsible for voice, data and video communication and charge a fee from terminating telcos. An international incoming call is first routed through an ILDO who then forwards it to an NLDO to which a call is made. ILDOs argued that telecom operators who both international licensees and service providers are able to allow calls at zero margin.

Tata Communications said vertically integrated telcos offer discounts to foreign operators making business unviable for independent ILDOs. “This has forced us (ILDOs) to keep our charges to foreign operators as low as Re 0.30 per minute to remain competitive,” said Praveen Sharma the head of Regulatory Affairs at Tata Communications, according to ET Telecom.

Another ILDO, Spectra said their revenues are going down in this system and proposed a revenue-sharing model to promote healthy growth in the sector.

“The previous year, we had a turnover of Rs 0. Soon, we will not be able to survive in a loss-making business and it will become a monopolistic structure with absolute power with the telcos,” Brajesh Chandra Jain, an advisor to Shyam Spectra Pvt Ltd.

Telcos Vote for Current Fixed ITC Mechanism

Meanwhile, telecom operators such as Airtel and Jio want the current fixed ITC mechanism to continue, but with a higher rate. Vodafone Idea, instead, backed a variable charges regime, but at a higher price range.

Bharti Airtel wants ITC to be raised to Re 1 per minute, and later on move to Rs 3-3.50 range, which is equal to the charges paid by the Indian Access Providers for the termination in foreign countries. Jio wants ITC to be fixed in the range of 65-75 paise per minute. Vodafone Idea wants variable pricing though they submitted that ITC range be at a minimum of Rs 0.75 to Rs 1.25.

Trai’s latest move comes less than two years after it had slashed ITC by 43% to current 30 paise per minute in January 2018. This regulation was then opposed by incumbent players who saw threat to their revenue. Though Jio at that time had backed Trai move, the telco now wants ITC charges to be raised.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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