India's telecom regulator has reduced the global termination rate - a charge paid by worldwide operators to local networks that receive calls - to 30 paise a minute, from 53 paise a minute.
The new rate will be effective from February 1.
The telecom regulator has slashed worldwide termination charge (ITC) by 43%.
The global termination charges (ITC) are the charges payable by an ILDO to the access provider in the country in whose network the call terminates.
Trai has argued that reduction in termination charge would reduce arbitrage with domestic call tariffs, therefore plugging the illegal VOIP gateway business in India, which will in turn lead to the eradication of the grey market for global incoming traffic. The prices of global calls are expected to drop.
It added that the grey market, which routes global calls by setting up illegal voice-over internet protocol gateways, needed to be curbed. This would not only plug the leakages in the revenue accruable to the country and Indian TSPs, but would also ensure that India continues to earn precious Forex from the worldwide incoming voice traffic busines " the TRAi said.
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"In view of the significant arbitrage opportunity between global termination charge and domestic rates, high level of worldwide termination charge will also give rise to growth of the grey market at the cost of national security and revenues of Indian operators", the telecom regulator said.
But the Cellular Operators Association of India (COAI) which represents top carriers differed strongly, arguing that the move was a "body blow" to incumbent carriers, at a time when the industry was passing through one of its toughest phases with severe financial stress, and has sought for relief from the government. Back in February 2015, TRAI increased the ITC to 53 paise per minute from 40 paise per minute. The companies had also been seeking an increase in this charge to Re 1 and then to Rs 3.50.
The regulator's September 19 document on regulations on domestic charges had specified it would issue a separate regulation on the issue.
The number of global calls made to India were comparatively lesser than those originating from the country. "At present, about 20 per cent worldwide incoming calls terminate in India via grey routes".
"Any reduction in termination cost is going to have a major impact".
The latest rule from TRAI issued as part of the Telecommunication Interconnection Usage Charges (Fourteenth Amendment) Regulations, 2018, will benefit the operator which carries calls outside the country, officially referred to as the International Long Distance Operator (ILDO).