Section 33 in Telecommunication Interconnection (Charges and Revenue Sharing) Regulation, 1999
33. The second consultation paper had raised a question of whether, similar to basic service providers, cellular mobile service providers should get a share of the long distance call revenue. Cellular mobile service providers had been in favour of such revenue sharing, but basic service providers were against it. The Authority has decided not to provide for such revenue sharing. An important reason for this decision is that while basic service providers have an access deficit to make up from long distance and international call charges, the situation regarding cellular mobile sector is different. For the latter, profitability has been built into the specified tariffs that are based on "median" cost estimate (and not on a lower estimate based on costs of an efficient service provider). Rentals cover capital costs and half of the license fee (for service providers in the metro area). The other half of the license fee, operational costs and a profit margin is taken into account in the calculation of the air time charge of Rs. 6 per minute. Moreover, tariff forbearance has been specified for supplementary services, which also provide a basis for substantial revenues, and tariff flexibility has been offered for cellular mobile tariffs for, inter alia, long distance calls made within the circle to other subscribers of the cellular mobile service provider. There does not, therefore, seem to be a basis at present to provide for revenue sharing between cellular mobile and basic service providers for long distance calls made from cellular mobile.
