In a move that could halve SMS charges, the Telecom Regulatory Authority of India (Trai) has asked mobile operators to slash tariffs voluntarily. Unlike the voice traffic, the cost component in SMS is negligible-around 2 paise. Still, SMS tariffs are either higher than voice rates or at best comparable.
Sources say Trai has held two rounds of negotiations with the Cellular Operators Association of India (COAI), the apex of body of GSM mobile operators, convincing them to voluntarily bring down the tariffs, failing which it would intervene through regulation. In fact, two years back also Trai had urged the operators to bring down SMS rates. The average tariff for local calls is Re 1, the same as the local SMS rate, while for STD calls, the average tariff is Rs 1.50 and the SMS rate is higher at Rs 2. The operators, however, are resisting the move, as SMS makes up 50% revenue of their value added services. T hey feel this move would imply micro-managing of their operations by the regulator and argue that the rates be best left to market forces. Further, operators say that facing low average revenue per user (Arpu), revenue from value-added services (VAS) is critical to their profitability. According to Trai, while service providers have to pay termination charges and carriage costs for voice calls, no such cost is involved in SMS traffic, apart from negligible capital expenditure. For voice call, for instance, service providers pay a termination charge of 30 paise per minute---in cases where a call originates from one operator's network and terminates in another's. In cases where service providers do not possess a long distance network they pay a carriage charge, with a ceiling of.60 paise per minute to the ILD/NLD operator whose network is used for carrying the calls. No termination charge is payable in the case of SMS traffic. For carrying SMS traffic, operators use a signalling channel, which is distinct from the channel used for carrying voice traffic. It is to bring parity between voice calls and SMS that the regulator has asked operators to bring down the SMS charges sharply. For a telecom company, around 14% revenue comes from VAS, with SMS constituting almost half of it. Over the next five years, VAS could contribute 30% revenues to a telecom company http://www.financialexpress.com:80/news/Trai-asks-telcos-to-bring-down-SMS-charges/359055/ ekamber The greatest lesson in life is to know that even fools are right sometimes. ---Churchill --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
