Vodafone Group Plc


The UK regulator, Ofcom, has proposed cuts in interconnection fees (also known as mobile termination rates), the wholesale charges that operators make to connect calls to each others’ networks. It has unveiled plans to cut the rate in stages from 4.3 pence ($0.065) per minute to 0.005 pence per minute by 2015.
The roll-out plans of new mobile players could be dampened with some of the existing pan-Indian operators demanding higher rates for providing interconnection. This includes higher termination rates (levied for ending calls from a new operator’s subscriber to an incumbent player’s network) and port charges (for accepting traffic from a new player to an existing network). Incumbent operators such as Bharti Airtel and Vodafone are at an advantageous position because they have a large subscriber base and, therefore, it is necessary for the new players to interconnect. If the new operators do not interconnect with them then their subscribers will not be able to call users on the incumbent player’s network. “The interconnection charges being imposed by the existing players are based on the telecom regulator’s order issued in 2003.