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NEW DELHI: Incoming international calls to India will become costlier if the telecoms regulator accepts a proposal mooted by local mobile phone companies.

Currently, any international incoming call to India is charged a flat 40 paise/minute when it terminates here. Domestic operators want to raise this by a minimum of 33% to 60 paise a minute.

Their logic: Globally, most countries have high termination charges for calls coming in from foreign destinations. They also say that Indian customers who make international calls are charged very high termination rates, sometimes as high as Rs3-4 a minute, to certain countries in West Asia like Saudi Arabia and Oman and attribute this to the reason behind ISD rates staying high.

Put simply, termination charges make up close to 50% of the total call charges and any reduction here will lead to lower mobile tariffs. Since incoming traffic to India is estimated to be nearly four times higher when compared to outgoing international calls, telcos also say that an increase in termination rates (for incoming international calls) will lead to higher foreign exchange coming into the country.

Last year, the regulator had turned down BSNL’s demand that domestic operators here be allowed to charge international telcos up to Rs 3/minute for terminating calls here. BSNL had said that this would increase industry’s revenues by up to $1 billion annually and also allow companies to cross subsidise their local operations.

The regulator had then raised termination charges by a third to Rs 0.40/minute and it is unlikely that TRAI may resort to another hike in this space in the immediate future.

A top executive with a telecom company said that TRAI should allow Indian companies to negotiate termination charges with foreign players for calls coming to India. “This will ensure that termination charges are determined by market forces. Even if there be an increase in incoming termination charge, domestic consumers will not be affected, only customers abroad will pay marginally more to make calls to India,” this executive said.

As per industry estimates, the average rate to terminate a call being made from India to the UAE is about Rs 4/minute, while it is little over Rs 3/minute for Saudi Arabia, Rs 0.80/minute for Malaysia and Rs 2.80 for the United Kingdom. ET has not been able to independently confirm these figures. On the other hand, Indian telcos receive a flat Rs 0.40 for all incoming calls from abroad, irrespective of the country of origin.

“The termination charges levied by India on incoming international traffic are among the lowest in the world. This has not only resulted in a lost opportunity to earn greater foreign exchange, but has also resulted in subsidised calling costs for international subscribers, who on the whole have a much higher paying capacity. This in turn has pressurised Indian subscribers and telecom operators in an inequitable and unfair manner,” explained Bharti Airtel CEO Sanjay Kapoor.

According to industry estimates, in financial year 2009-10, India received a total of 28 billion minutes of international incoming traffic, while it sent out only 6.2 billion minutes of international outgoing traffic. But, despite receiving an additional 22 billion minutes of international traffic, operators here combined made about $ 392 million on the international incoming traffic while they paid out a total of $515 million for terminating calls in other countries.

This translates to a net loss of $265 million worth of opportunity towards foreign exchange, and executives with domestic operators say that this amount can be recovered if they are allowed to fix termination charges on a reciprocal basis. Domestic operators also add that the net loss, or outgo from India, will widen to over $430 million in the current fiscal.

Telcos also argue that lower termination rates for incoming international calls to India had resulted in a 100% jump in inbound traffic to the country over the last two years (14 billion minutes in FY 07-08 to 28 billion minutes in FY09-10), even as outgoing traffic, or ISD calls, grew just 20% during this period to about 6.2 billion minutes in 09-10.

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This post was submitted by Chinmaya Nayak.

Thanks to timesofindia.indiatimes.com