TRAI caps charges for IP connections between telecom networks

The Telecom Regulatory Authority of India (TRAI) on Monday announced caps on the charges levied for internet-based (IP) connections between telecom companies. Under this decision, telecom operators will not be able to charge more than the prescribed limit for IP connections between their respective networks.

Under the Telecom Interconnection (Port Charges) (Third Amendment) Regulations, 2026, an operator cannot charge more than ₹5.6 lakh per year for a 1 Gbps IP port and ₹42.3 lakh per year for a 10 Gbps port. These new rules will come into effect from 1 January, 2027.

In the telecom sector, a 'port' is a point where two networks meet to exchange traffic. When a user of one network calls a person on another network, the call passes through such a port. The operator providing the port charges the other operator for it.

According to a report by Hindustan Times, this move is part of a broader effort to phase out decades-old technology that operators still use to connect calls between networks. Currently, operators carry 4G and 5G calls over IP networks within their own systems, but many are still interconnected via old E1 ports. TRAI stated that this mixed arrangement causes delays, reduces call quality between networks, and increases costs.

A separate amendment, the Telecom Interconnection (Third Amendment) Regulations, 2026, is also included with the rules, which will come into effect from 1 January. This amendment makes it mandatory for all new interconnections to be IP-based and mandates the migration of existing E1 links to IP within three years.

Stakeholders had informed the regulator that E1 equipment is outdated, difficult to procure, and hard to maintain. The Memorandum of Explanation by TRAI accompanying the regulations stated that stakeholders have indicated that TDM-based equipment is now obsolete, not easily available in the market, and has reached the end of its life cycle. Difficulties are being faced in obtaining the manpower and OEM (Original Equipment Manufacturer) support required to operate this equipment.

The new rules include both IP ports measured in Mbps or Gbps and old 2.048 Mbps E1 ports in the definition of 'port'. Current charges will now apply only to E1 ports. Operators may agree on lower rates between themselves. For port sizes other than 1 Gbps and 10 Gbps, the port-providing operator will have to determine charges transparently using the methodology adopted by TRAI.

Uniform rates will apply to all services, including mobile, fixed line, national long-distance, and international long-distance. Some stakeholders had requested different charges for various services, but TRAI rejected this, as IP ports carry all types of traffic equally.

TRAI has also imposed penalties on operators who miss reporting deadlines. For the first 15 days, a penalty of ₹25,000 per day may apply, and thereafter up to ₹50,000 per day, capped at ₹15 lakh per violation for each service area. Operators will be given an opportunity for a hearing before any penalty is imposed, and TRAI may waive or reduce the fine. If the penalty is not paid within 21 days, interest at 2 per cent above the one-year lending rate (MCLR) of State Bank of India will apply.