New telecom operators such as Swan, Unitech, Datacom and Loop, and Reliance Communications have asked regulator Trai to reduce the termination charges, while existing GSM players, led by Bharti, want the 30 paise per minute charge to continue.
Deciding on the new mobile termination charge is going to be a tough call for Trai given these extreme positions and the fact that a lower termination fee in the overall review of interconnection charge will impact the retail tariff.
Termination charge is the fee given by an operator, on whose network a call originates, to the operator on whose network the call ends.
"The termination charge for new entrants is a cost and not revenue. The charge has a direct bearing on retail tariffs. Higher the termination charge, higher will be the retail tariffs and therefore it is anti-consumer, besides reducing the margins and competitive ability of new entrants to match the tariffs of the established and large operators. The termination charge is around 30-50 per cent of the total retail tariff. The new entrants will have to match or provide lower tariffs than incumbent operators charge," said the new operators in their presentation to Trai.
Reliance Communications, which has both GSM and CDMA operations, said reduction in mobile termination charge would lead to substantial drop in retail tariff.