Indian telecom space has made lot of buzz even internationally due to declining tariff and new price structures being introduced in the market. This time it seems TRAI is gunning after SMS to bring normality in charges.
The termination charges for SMS was fixed at 10 paisa but TRAI never monitored the transactions in SMS charges which resulted in operators sending messages without paying any termination charges to each other. The business logic for operators was that SMS constitutes a major chunk of their traffic thus non-charging would negate any payment towards termination charges.
This resulted in operators offering free SMS packs with mutual understanding. This started choking the networks as new entrants also started the same practice of offering free or lower SMS rates pack. Older telecos are not comfortable with new entrants utilizing similar strategy as majority of old customers reside on their network. Thus Bharti Airtel recently started charging 10 paisa as termination charges without dolling out any favors to other networks.
Currently a voice call is charged lesser than a SMS. The SMS charges ranges from 50 paisa – Rs.1 without considering any value added package plans. Thus the levying of termination charges will bring transparency to the whole messaging system at the same time see irrational telecom packages going out of market and SMS charges falling inline with calling charges.
This move will hardly increase SMS charges but if TRAI interferes to bring down the SMS prices as majority of this revenues goes into operators kitty it could start a downfall in SMS charges.The operators currently earn a hefty profit through messaging as network cost is minimal in terminating messages thus they needs to bring rationality in their charges to benefit the subscribers.
