Trai wants premium SMS rates to be reduced

In a veiled threat to the mobile operators, the Telecom Rgulatory Authority of India (Trai) on Monday said that it hoped that operators voluntarily reduce the charges of premium SMS service, or, it may have to intervene.

The hint became apparent when in a major relief to the operators Trai decided to maintain the status quo on the interconnection usage charges (IUC) for SMS service but noted that current charges of premium SMS are on the higher side and bear no relationship with the cost and nature of services rendered.

Trai also stated that henceforth it would closely monitor the SMS trends.

Premium SMS are the ones run by TV channels where consumers are urged to participate in opinion polls or give their views on topical issues. Here, Trai has asked the telecom operators to make necessary arrangements with content providers to make the consumers aware of the tariff of the premium SMS service.

As per the prevailing IUC regulation, termination and carriage charges for SMS have not been specified by the Trai and are forborne.

Trai's subtle hint must be seen in the context of a statement made by communications and IT minister Dayanidhi Maran sometime back when he had said that during his tenure charges would only have to go down and not vice-versa.

The average prevalent SMS charge is Re 1 for a local SMS, Rs 2 for national and Rs 3 to Rs 5 for an international SMS. However, premium SMS rates are generally in the range of Rs 3 to Rs 10. Short messaging services contribute roughly 5-6% of the total revenues of a telecom company.

SMS in India is an emerging market, growing 109% during 2005-06. On an average a mobile subscriber sent 41 SMS per month during fiscal 2005-06 as against 31 in the previous fiscal.

To address some of the representations from service providers, Trai had issued a consultation paper on the issue of IUC charges for SMS.

The main issues raised in consultation paper were IUC for SMS and premium rate SMS.