Mobile tariffs may fall, TRAI suggests zero termination charge

 

In its submission to the Supreme Court, TRAI has submitted a number of models for calculating IUC, but it has suggested that termination charges should be completely removed by 2014. At present, termination charge is 20 paise per minute and it forms a part of mobile tariffs

New Delhi: In a development that would bring mobile telephone tariffs further down, the Telecom Regulatory Authority of India (TRAI) has suggested doing away with termination charges in a phased manner over the next three years, reports PTI.

Termination charges, a part of Interconnection Usage Charges (IUC), are a levy paid by one operator to another on whose network a call ends. Any change in it will have impact on mobile tariffs.

At present, termination charge is 20 paise per minute and it forms a part of mobile tariffs.

In its submission to the Supreme Court, TRAI has submitted a number of models for calculating IUC, but it has suggested that termination charges should be completely removed by 2014.

“It is felt that it will take another two years for asymmetries in traffic flows to converge to some form of equilibrium between new and old operators, especially with an enabling termination charges regime with termination charges set at lower levels than at present,” TRAI said in the affidavit submitted to the Supreme Court.

A final decision on the issue will be taken by the apex court.

GSM operators are opposing any move to reduce termination charge, while the CDMA players and new operators together are supporting any move for complete removal of the levy.

The move to reduce the fee has been opposed by incumbent operators as they stand to lose revenue. But new players are in favour of a low termination rates because for them the net outflow of traffic is more than incoming calls.

TRAI is of the opinion that there should be a progressive reduction in termination charges finally converging to zero termination charges i.e. Bill and Keep (BAK) at the end of two years from now, it added.

TRAI said establishment of a clear three-year outlook for IUC would provide regulatory predictability and enable service providers to plan their networks and businesses accordingly.

In the meantime, TRAI is of the view that the termination rates arrived at through pure long run incremental cost (LRIC) method may be made applicable now which will glide towards BAK in two years.

“This will give sufficient time to operators to adjust to the changes in the termination regime and will ensure a smooth transition,” TRAI said.

New players are likely to benefit from such reductions since they are likely to be the first ones to drop tariffs, which would then put pressure on incumbents to follow suit despite being negatively affected by lower charges.

The Supreme Court had earlier directed TRAI to evolve a new set of interconnection charges between operators for carrying calls of one network through others.

The apex court had given its direction on a petition by TRAI challenging the TDSAT order, which had set aside the TRAI’s Interconnection Usage Charges (Regulation), 2009.

The TDSAT had set aside TRAI’s 2009 IUCR on a host of petitions by various mobile service providers objecting to the telecom regulator’s order.

In its 2009 IUC regulation, TRAI had fixed a mobile termination charge (MTC) at 20 paise per minute for all local and national long-distance charges.

It had also raised the MTC for incoming international calls to 40 paise per minute from 30 paise, while putting a ceiling on carriage fee of 65 paise per minute for domestic long-distance calls.

 

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Moneylife Foundation holds special workshop for senior citizens on ‘How to be safe and smart with your money’

The Foundation held a special session on personal finance for those in their twilight years on how they can be safe with their money by avoiding scams and how they can make the best of their retirement corpus

 

“Not many senior citizens are aware that an option for reverse mortgage exists, and that it can be a good thing to look into after retirement,” said Mr Debashis Basu, trustee of Moneylife Foundation, speaking at a seminar held by the same organisation. He was speaking on investment and financial issues related to senior citizens. 

Mr Basu said, “Reverse mortgage is a fairly new product, but it guarantees a fixed income till someone’s death. After his death, his spouse continues to enjoy the income as long as she is alive, after which, the property goes to the bank or housing finance corporation. It may not be a flawless option, but I think people need to look at it carefully.”

There is another kind of reverse mortgage available, by which the heir or children can reclaim the property by repaying the loan, Mr Basu explained. He also talked about investing in stocks and mutual funds, which he says is essential because inflation erodes fixed deposits and savings.

“When inflation is somewhere near 10%, and your bank/government bond is giving you an 8% interest, it is not a profitable situation. One must judiciously invest in stocks and mutual funds to create wealth because with age, expenses also grow. So it is better to start from 40,” he said. He said that health insurance is a must for every senior citizen, but unfortunately, the sector is badly regulated. Companies often charge high premiums, but enthusiastically reject loans, but it is better to have a medical insurance in case of senior citizens.

He advised against investing in gold, which doesn’t give any returns on its own. He said, “Gold prices are linked to value of US dollar and the rupee, and value of US Treasury Bonds. Unless you understand the currencies thoroughly, it is a risky speculative asset,” he said. 

Ms Sucheta Dalal, trustee of Moneylife Foundation also spoke on the various scams and pyramid schemes which must be avoided to save money. She said, “Senior citizens and women are especially vulnerable, they trust what their friends and relatives say and are often duped.” 

She also spoke Wills and nominations, and said, “Recently, a Bombay High Court judge has ruled that a nominee’s rights supercede the rights of the heir, so be very careful when selecting a nominee. Earlier, it was considered that after a person dies, the nominee transfers the shares/assets to the heir.”

Ms Dalal also talked about the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, which has been implemented in a few states excluding Maharashtra. The Act says that parents are entitled to an allowance, and if their children refuse to take care of them, the latter can be fined or imprisoned.

She also talked about retirement homes, which are becoming popular. “Unfortuantely, it is a new area, and there is not much information available. I would advise that one goes to a developer of repute to avoid future hassles, and think carefully whether living there would be comfortable,” she said. She said that it is better to go for retirement homes which are available on a deposit-and-lease basis, rather than buy a property. “Because then, you can only sell it to senior citizens. You are stuck if you want to move out, and after your death, your heir can neither sell nor live in it,” she said. 

 

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COMMENTS

Pjasani

5 years ago

Very nice session nd its very useful to all the people.

Awaiting the seminar or special story on ML magazines like retirement planing & hw to invest safely in mutual funds.

Sundaram

5 years ago

Hope ML Foundation would conduct a seminar on "Retirement homes-how to choose one & pitfalls to avoid". It would be very beneficial for the elderly.

Kishore

5 years ago

Senor citizens of Kerala will soon be approached by the "law abiding corporate citizen" Amway's brokers as their offices started functioning again with the "approval" of the state government.

TRAI raises SMS limit to 200 per day per SIM

To deter unsolicited SMSes by telemarketing companies, TRAI had earlier restricted the number of non-commercial SMSes that can be send from a SIM to 100. The new cap of 200 SMSes per SIM per day will be effective from today, the telecom regulator said

New Delhi: Telecom consumers will now be able to send up to 200 SMSes per day from a SIM, as against the earlier limit of just 100 SMSes per day imposed by the Telecom Regulatory Authority of India (TRAI), reports PTI.

“The authority has received representations from some service providers and consumers to increase the limit of 100 SMSes per day per SIM. The authority has considered these representations and decided to increase the limit of 100 SMSes per day per SIM to 200 SMSes per day per SIM,” TRAI said in a statement today.

To deter unsolicited SMSes by telemarketing companies, TRAI had earlier restricted the number of non-commercial SMSes that can be send from a SIM to 100. There was no restriction on commercial messages sent through telemarketing companies registered with TRAI.

The new cap of 200 SMSes per SIM per day will be effective from today, the telecom regulator added.

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