core sector communique

New Delhi, October 8 2010…. Mr. Rajan S Mathews, Director General COAI has stated that there appears to be some confusion on the COAI position on termination charges and other IUC charges such as port charges and intra circle carriage charges.

 

Clarifying COAI’s position on the termination charges, Mr. Rajan S Mathews, Director General COAI emphasized that COAI is deeply committed to the cause of cost based interconnection and also believe that there should be fairness and reciprocity in respect of all interconnection charges.

 

Mr. Mathews said “As regards the Interconnect pricing (Mobile Termination Charge), we have always maintained that the same should be based on a robust cost based model, which justifies the much needed investment for expansion of services into Rural India.  He further stated that in order to be in line with international best practices, model should take into accounts all the internationally accepted cost elements.

 

Since many more million subscribers are yet to be connected, we believe that FLLRIC    (Forward Looking Long Run Incremental Cost) approach is the way to go forward and will give better results than any other cost based methodology.

 

He further clarified that India has the lowest tariffs and ARPU in the world. With majority of the subscribers falling in the ‘low billable value band’, termination revenues are at the core to the economics of serving these low usage subscribers. A below cost termination charge will make it uneconomical to serve low usage subscribers, many of whom will come from the rural areas.

 

He said that in the interview / article he was in fact referring to “reduction in the Port Charges and Carriage Charges, and not to the reduction in the termination charges. And that it may be noted that the comment of “lower” charges was made in the context of the port charges being demanded by BSNL and the recent order by Hon’ble Supreme Court on this matter and not in the context of termination charges, as has been erroneously reported in the article.

 

 

Mr. Mathews also stated that in its various submissions to the Telecom Regulatory Authority & Department of Telecommunication, COAI has persistently reiterated and sought review on the one-sided interconnection arrangement imposed by BSNL with respect to levy of port charges and intra circle carriage charges, which is incorrect, unjust and unfair and against all principles of reciprocity, fair play and level playing field.