THE GAZETTE OF INDIA .EXTRAORDINARY

[PART III—SEC. 41

TELECOM REGULATORY AUTHORITY OF INDIA

NOTIFICATION

New Delhi, the 30th January, 2002

No. 303/3/2002-TRAI(Econ.).—In exercise of the powers conferred upon it under sub-section

(2) of the Section 11 of the Telecom Regulatory Authority of India Act, 1997 as amended by TRAI

(Amendment) Act, 2000, the Telecom Regulatory Authority of India (TRAI) hereby makes the following

order by an amendment to the Telecommunication Tariff Order, 1999 by notification in the Official Gazette,

in respect of tariffs at which Telecommunication services within India and outside India shall be'

provided :

THE TELECOMMUNICATION TARIFF (EIGHTEENTH AMENDMENT)

ORDER, 2002

(2 of2002)

Section I

Short title, extent and commencement:

(i) This Order shall be called " The Telecommunication Tariff (Eighteenth

Amendment) Order, 2002".

(ii) This Order shall come into force with effect from the date of notification in

the Official Gazette.

Section n

Under Schedule II Cellular Mobile Telecom Service (CMTS) for the existing

clause "14.a (Roaming)" the following shall be substituted, namely-

"14.a Regional and National Roaming:-

Item

Refundable Security Deposit

Entry Fee (One time charge)

Monthly

Access

Charge

for

Regional

and/or

National

Roaming

Airtime charge

PSTN charge

Surcharge

Tariff

Forbearance

Nil

Rs.100.00 as ceiling

Rs.3.00 per minute as ceiling

As applicable from time to time to the

fixed network

15% as ceiling on airtime component.

14aa

International Roaming

Forbearance

14.aaa

Other matters related to Roaming

Forbearance."

The tariffs under this Section shall be effective from 1* March 2002,

Section HI

This Order contains at Annex A an Explanatory Memorandum to provide

clarity and transparency to the tariffs specified in this Order.

ByOrder,

Dr. HARSHA VARDHANA SINGH, Secy.-cum-Principal Advisor

[No. ADVT-m/IV/Exty./142/01]

THEGAZETTF.nFrNmiA.T7v^QRD]NARY

fPARTllI-SEc.41

Anne^ A

EXPLANATORY MEMORANDUM

Introduction

1) In the Telecommunication Tariff Order (TTO), 1999, tariffs for all

supplementary telecommunication services and vahie added services including

roaming are subject to forbearance. The Authority has received complaints in

respect of high tariffs charged by service providers for provision of roaming

and Authority's intervention has been sought in streamlining tariffs for

roaming.

The Authority has considered all aspects of roaming tariffs and has

decided, in consumer interest, to regulate the tariffs for national/regional

roaming. This amendment, however, does not change the existing regime for

international roaming.

EL Current Charging

2) TRAI examined the roaming charges levieu by various cellular mobile

operators. In general, roaming attracts two charges; a fixed charge for access

to the facility and variable charges that depend on usage. The monthly fixed

access charge for roaming for service providers varies between Rs. 0.00 to Rs.

400.00 across operators. Only one operator levies a charge of Rs. 400.00 per

month, while others are generally in the range of Rs, 100.00 to Rs. 150.00 per

month.

Data from service providers shows that airtime charge for national

automatic roaming is Rs. 10.00 per minute on a 60 seconds pulse.

addition, the subscriber is also required to pay the applicable PSTN charge and

a surcharge ranging between 10% and 15% on total billed amount for the call

(airtime plus applicable PSTN charges). In certain cases, the surcharge is

levied only on airtime and not the applicable PSTN charges.

3) Thus the various elements of charge for roaming can be summarised as follows:

a) Refundable security Deposit

b) Fixed one time charges for the roaming facility

c) Monthly access charges for roaming

d) Airtime charge

e) Applicable PSTN charges; and

f) Surcharge on the billed amount

IH.

Analysis of Roaming Charges

A comparison of the airtime charge for national automatic roaming (Rs. 10.00

per minute) and the peak charge for airtime across various tariff plans shows

that roaming charges are considerably higher than airtime charges levied by

service providers on their own subscribers. While airtime rates applicable in

the subscribers home network have been declining over the last few months,

roaming charges have remained at Rs.10 per minute. In this context, the

Authority felt it justifiable to examine the incremental costs for provision of

roaming and sought relevant data from the Cellular Operators Association of

India (COAI).

The Authority has taken into consideration the various capital and operational

cost elements provided by cellular mobile operators through COAI. In all,

COAI submitted data for eight operators of which two were from metros. For

the estimation of tariffs, due to incompleteness of the information given, data

for one metro operator and three circle operators has been used. In tune with

the methodology followed in the past, capital costs have been used to derive

monthly rentals and operating costs have been used to derive airtime charge

per minute.

In deciding on the tariff regime applicable for national roaming, the Authority

considered only the additional or incremental costs associated with provision

of the roaming facility. All the fixed costs submitted by COAI have been

considered in the cost base for determining monthly rental for roaming. In

addition, the Authority has taken into account the signalling links which the

various operators share with BSNL and for which BSNL charges Rs.25.00 per

roaming subscriber.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART III—SEC. 41

IV. Estimation of Bench Mark charges for Rental and Airtime

For estimation of monthly rental, 22% Annual Recurring Expenditure (ARE)

has been applied to the capital cost. To this figure, signalling charge levied by

BSNL of Rs. 25.00 per subscriber per month and revenue share license fee of

10% has been added to derive the monthly rental of national roaming.

The median cost based monthly rental is estimated from the sample as

Rs.38.00. Taking account of an average prevailing airtime per minute and

adding the incremental OPEX cost for roaming, we obtain an airtime charge

for roaming at sqmewhat less than Rs. 3.00 per minute, The Authority

considered that the roaming airtime charges arrived at are based on charges

and cost data currently available from the service providers and that it is a

value added service. The cost data available has, however, been limited.

Therefore, while the Authority decided to reduce the prevailing charges for

roaming, it has permitted some margin in the cost based estimates of rental,

and has specified the tariffs as ceilings. The Authority has decided to specify a

ceiling monthly rental of Rs. 100.00, a ceiling roaming airtime charge at

Rs.3.00 per minute and a ceiling surcharge (only on airtime) at 15%.

The Authority is of the view that there should be no fixed one-time access fee

for roaming, since the relevant costs would be covered by the applicable

tariffs. The refundable security deposit for roaming, however, continues to be

under forbearance and shall be subject to the general regulation on security

deposits prescribed in the Telecommunication Tariff Order (TTO) 1999.

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and Published by the Controller of Publications, Delhi-110034.