The Telecom Regulatory Authority of India has announced 33 per cent reduction in charges; the money two operators pay each other while transferring calls from one network to other.

The move, applicable from April 1 onwards, may result in nearly 20 per cent drop in STD and local calls from mobiles. The decision would also applicable to 3G services due to launch in coming months.

With new regulations, telecom companies will have to pay termination charges of 20 paise a minute against 30 paise per minute currently. TRAI asked mobile operators to pass benefits to customers without fearing small loses. The regulator also dropped the carriage charges from the current level of 20 paise a minute to 15, paving a way for lower tariffs for calls made from a private operators network to BSNL's landline network.

Mobile operators, including Swan, Loop, Unitech and Reliance Communications, while demanding further reduction in termination charges, said, "We were hoping that TRAI would bring the mobile termination rates to less than 9 paise a minute. However, we will pass on to the consumer whatever reduction the regulator has been announced." The decision would cause big loses for existing operators including Bharti Airtel and Vodafone Essar, having huge customer base.

Mr. T. V. Ramachandran, Director General, Cellular Operators' Association of India, said, "This could constrain operators to re-assess their business viability before venturing out in the rural and remote areas."