In a bid to boost fixed line phone connections in the country, telecom regulator Trai on Monday removed charges that a landline service provider has to pay to the other service providers for transmitting its customers' phone calls - a move that is likely to lead to lower tariffs.
Now, calls made from landline-to-landline or landline-to- mobiles will not include the interconnection charge, which was 20 paise.
Trai has also reduced network interconnection usage charges (IUC) on calls made from mobile phones by about 30 per cent to 14 paise per call from 20 paise earlier.
"To promote investment in, and adoption of, wireline networks, so that they may become an effective vehicle for the delivery of high-speed Internet in the country, the Authority has decided to prescribe FTC (fixed termination) as well as MTC (mobile termination charge) for wireline to wireless calls as zero," Trai said in the new IUC rule issued on Monday.
Telecom subscribers can't communicate with each other or connect with other networks unless necessary interconnection arrangements are in place.
A telecom company is required to pay interconnection charges when its subscriber make call to subscriber of other network. The charge gets added up in final price that a subscriber has to pay.
"The Authority is of the opinion that in case the MTC is set to zero for wireline to wireless calls, wireline access providers would be able to provide innovative tariff packages (e.g. flat rental plans with unlimited or a significantly large number of outgoing calls)," Trai said.
Similarly, in case the FTC for calls originating from wireless networks and terminating on wireline networks is set to zero, this "would propel wireless access providers to offer cheaper tariffs for wireless-to-wireline calls," Telecom Regulatory Authority of India said.
Landline connections in the country have been declining since the time mobile incoming calls were made free. While mobile subscriber base at the end of 2014 reached all time high at 94.39 crore, landline connections are only 2.7 crore.
State-run telecom companies BSNL dominates landline phone connections with 62.71 per cent market share followed by MTNL 13.04 per cent, Bharti Airtel 12.55 per cent, Tata Teleservices 5.98 per cent and Reliance Communications 4.39 per cent.
Videocon's Quadrant, Vodafone and Sistema Shyam account for 1.2 per cent market share. Landline connections of private players are mainly meant for providing broadband connections.
In mobile segment, Bharti Airtel leads market with 23.01 per cent market share followed by Vodafone 18.93 per cent, Idea Cellular 15.95 per cent, RCom 11.26 per cent, BSNL 8.62 per cent, Aircel 8.33 per cent, Tata Teleservices 7.01 and Uninor 4.62 per cent.
Sistema Shyam, Videocon Telecom and MTNL account for about 2 per cent mobile service market share.