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Hike inbound ISD rates: Airtel

DC | PAWAN BALI
Published Dec 23, 2013, 2:59 pm IST
Updated Mar 19, 2019, 2:06 am IST
India could earn $ 3.6 bn/annum in foreign currency if it increases termination charges on ISD calls.

New Delhi: The country could earn $ 3.6 billion per annum in foreign currency, if it increases termination charges on ISD calls coming to India, according to the  country’s largest telecom operator Bharti Airtel.

The additional inflow of foreign currency will be helpful for India which has been trying to bring down the current account deficit, especially when the US Fed is looking to ease its monetary stimulus.  

 

Termination charges is the money paid by one operator to another on whose network a call ends. For example in domestic operations, if an Idea subscriber calls a customer of Airtel, then Idea will have to pay a termination charge to Airtel.

Bharti Airtel has told Trai that Indian consumers are subsidising the foreign players. The company noted that in recent times there has been huge increase in the incoming ISD calls as against  the outgoing calls.

“The ratio of incoming to outgoing calls has increased from three times to sixteen times over the last seven years. This implies that today for every outgoing call from India, the country is receiving 16 incoming international calls (as against the ratio of 1:3 in 2005-06),” said Bharti Airtel.

The company noted that the present termination charge on incoming ISD calls to India (40 paisa/minute) is amongst the lowest termination charges prevailing worldwide while the average termination rate paid by Indian operators is estimated at  around Rs 3.50/minute for outgoing international calls.

This incongruity in termination rates has created a pricing arbitrage of Rs 3.10 /minute in favour of international operators leading to an abnormally high imbalance in incoming calls to India against outgoing calls from India, said the company.

Bharti Airtel said that this results in an adverse impact on profitability of Indian telecom operators and lost opportunity to earn higher foreign exchange by the country. To induct competition, termination rates for incoming ISD calls should be increased, said the company.

“Assuming there is no reduction in inbound traffic volumes into India post termination charge increase, the opportunity cost associated with this increase in termination rates for incoming traffic could be as high as $3.6 billion per annum in incremental forex earnings,” added Bharti Airtel.

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