TRAI proposes interconnect charge for SMS

Posted on | June 15, 2006 |

In a consultation paper on regulating SMS, telecom regulator TRAI has proposed a interconnect usage charges (IUC) on SMS. But it acknowledged that there is an apprehension that IUC could increase SMS tariffs and has therefore sought opinion of all the stakeholders by June 30.

What is an Interconnect Usage Charge?

Interconnect charges are paid by one operator to another for terminating calls from the originating operator network to the destination / terminating operator network.

So if a Hutch subscriber calls a Airtel number than Hutch has to pay certain percentage of the call charge to Airtel.

At present, interconnect charges are paid by operators to each other for voice calls.

There is no such charge for SMS.

The move is aimed at compensating operators whose networks are getting choked due to incoming SMS traffic.

“With operators offering different bundled tariff plans for SMS and with SMS being increasingly used as an advertising medium, the SMS traffic imbalance across the operators is increasing. There is a possibility that some networks are burdened with a large proportion of incoming SMS traffic. Thus, there seems to be a need for regulatory intervention to ensure that no operator assumes an unnecessary burden,” TRAI said in the consultation paper.

I believe the problem is aggravated by bulk SMS providers who use their pipe with one operator to blast messages across operators. Since there is interconnect for SMS delivery but no IUC, the operators at the receiving end are forced to carry that traffic without any gains.

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