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Telcos raise concerns over zero tariffs for USSD-services

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Telecom operators like Vodafone Idea and Bharti Airtel advise against the dropping of tariffs completely on USSD-services to prevent undue financial stress on the telecom sector and ask for a phased reduction in tariffs and removal of QoS obligations.

Telcos raise concerns over zero tariffs for USSD-services
Telecommunications players in India have urged regulators against dropping the tariffs on unstructured supplementary service data (USSD)-based mobile banking and payment services. The companies have instead stated that a phased reduction of tariffs should be applied to ensure that the telecom sector doesn't endure additional financial stress.
"Charges of USSD service for mobile banking should be brought down in phases from current 50 paise to 5-10 paise, but in case the Authority plans to reduce it to zero, it may then create a suitable mechanism for fair compensation of telcos by concerned stakeholders," Bharti Airtel said in a submission to the Telecom Regulatory Authority of India (TRAI).
The submission comes after the TRAI last month proposed that USSD-based mobile banking and payment services should not have any tariffs imposed on them in order to promote digital financial services and to protect the interests of phone users.
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USSD is a Global System for Mobile Communications (GSM) used by telecom service providers to allow mobile devices to communicate with the servers of operators and banks.
By sending codes of up to 182 alphanumeric characters long, USSD allows mobile phones to establish a real-time connection through which information can be exchanged. USSD is used for mobile money services, prepaid callback services, menu-based information services and location-based content services.
TRAI had suggested the USSD tariffs be dropped to promote financial inclusion in rural India, as mobile phone penetration continues to increase across the country.
In the draft Telecommunication Tariff (66th Amendment) order, the regulatory authority stated that the tariffs for USSD-services were putting an extra financial burden on the groups like individuals from rural, underprivileged and low-income groups, who were most likely to use the services.
Telecom operators, however, state that the move to scrap tariffs would lead to undue stress on India’s already heavily debt-ridden telecom sector. The companies added that tariffs should only be reduced in a phased manner, and only to the level where telecoms still can recuperate the cost and expenditure of providing such services in the first place.
Vodafone Idea in its submission added that the cost of such operations should be borne by banks since it was the banking sector that was providing and using these services. "It would be a precarious trend with huge financial implications, if precedence is laid for mandating a service free of cost, for the other sector," the company stated.
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