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Cell cos dial wrong number on tariff hike

05-February-2004
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Cell cos dial wrong number on tariff hike

Cellular operators may blame it on Telecom Regulatory Authority of India (Trai’s) revised interconnect usage charges regime (IUC) for tariff hike, but reality lies elsewhere. A close look at the revised IUC indicate that it has resulted lesser cost to the cellular operators and thus increased margins in many segments. Though this does not reflect proportionally in revised tariffs.

IUC —a sum total of carriage charges, access deficit charges and termination charges decided by Trai — are charges that are payable by a telecom operator to other operators for terminating their calls.

For example, in case of cellular to fixed phone calls, the interconnect charges have either gone down or remained constant with only one exception. However, even as costs have primarily gone down, the tariffs for the postpaid users, mobile-to-fixed line tariffs have gone up by a rupee for all long distance segments. With costs going down and tariffs moving up, this implies relatively increased margins.

As per revised IUC regime, for cell-to-fixed local calls, the IUC remains constant at 80 paise. For intra-circle calls, in 50-200 km distance, the IUC is down to Rs 1.25 from Rs 1.45; in the 200-500 km range, IUC is down to Rs 1.50 from Rs 2.50; in the above 500 km range, IUC is down to 30 paise from Rs 1.25. For inter-circle calls, for distances below 50 km, IUC has gone up to 30 paise from zero; for 50-200 km segment there’s no change in IUC (at 50 paise); for 200-500 km segment IUC is down to 80 from Rs 1.25 and for over 500 km IUC is down to 80 paise from Rs 2.00.

In case of cellular to cellular phone calls, IUC has either increased or remained constant with one exception. The tariffs, meanwhile, have not increased proportionately. This implies there are relatively reduced or constant margins for operators. It may be pointed out that Trai has maintained based on data given by the operators and based on weighted averages, cellular operators are using this as an excuse to raise tariffs.

In the cell-to-cell local calls, IUC is down to 30 paise from 40 paise. For cell-to-cell intra-circle STD calls, IUC is up to 50 paise from 20 paise for less than 50 km; for 50-200km, IUC is up to 95 paise from 45 paise; for 200-500 km, IUC is up to Rs 1.20 from 75 paise; for above 500 km, IUC is up to Rs 1.40 from Rs 1.10. For cell-to-cell inter-circle calls, IUC is up by 60 paise to 80 paise in less than 50 km; for 50-200 km, they are up by Rs 1 to Rs 1.45; for 200-500 km, they are up to Rs 2 from 75 paise; for above 500 km, they are up to Rs 2.20 from 1.10.

The above tariff movements basically show a strategy on the cellular operators’ part not to let any cell-to-cell traffic migrate to cell-to-landline.

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