Reduction in port charges to lower telecom tariffs

New Delhi, Feb 2 (UNI) The Telecom Regulatory Authority of India's move today to reduce port charges by 29 per cent for various slabs from April one is expected to lower telecom tariffs and improve quality of services to consumers.

TRAI expects that service providers will pass the benefit of reduction in port charges to the consumers.

Also, Interconnection seekers are mandated to place their demand for the required number of ports, on every point of interconnection (POI) on the basis of traffic projection, on six monthly basis.

This will facilitate the Interconnection Providers to take timely action to procure the expansion equipment for provisioning of ports, TRAI said.

The move will also help effective and timely interconnection among different networks thereby improving the quality of service to consumers.

The Regulator today issued amended Regulations on port charges.

The amended regulations shall be effective from April 1, 2007.

With the induction of the competition in the telecom sector in the country, the interconnection among the service providers has become an essential requirement for the development of the sector.

In the multi-operator multi-service scenario, establishment of effective interconnection helps the consumers of one network to communicate with the consumers of another network.

Port is an essential part for the establishment of the interconnection between two networks. Its charges are payable by the interconnection seeker to the interconnection provider for terminating interconnection links on the network interface of the interconnection provider.

On May 28, 1999, the Authority had notified The Telecommunication Interconnection (Charges and Revenue Sharing) Regulation 1999, which specified arrangements among service providers for interconnection charges and revenue sharing for all telecommunication services including port charges.

A revised regulation on port charges The Telecommunication Interconnection (Port Charges) Regulation 2001, was made effective on 28th December 2001. There has been a long pending demand by interconnection seekers that port charges need to be reviewed to align with the current switch/exchange costs.

The present amendment has been issued after reviewing the costs.

In the present review, the Authority has taken costs of the network elements furnished by the service providers (interconnection seekers and interconnection providers) and also aligned the costing methodology with current practices adopted by the Authority in various regulations/tariff orders.

For determination of the port charges, the reasonable returns (Pre-tax Weighted Average Cost of Capital) at 14 per cent per annum on the capital employed (net block only) has been considered after providing depreciation at 10 per cent per annum based on Straight Line Method of depreciation.

UNI