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Telcos against zero tariffs for USSD-based services

Private telecom operators have urged the sector regulator to go for a graded reduction in tariffs for unstructured supplementary service data (USSD)-based mobile banking and payment services, arguing that any regulation to make such services free overnight would increase financial stress in the debt-laden sector.

In their submissions to TRAI, they have called for creation of a mechanism to compensate telcos by allowing them to recover costs and to remove existing quality of service (QoS) obligations if the tariff of such USSD-based services is cut to zero from 50 paise per session now.

“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 its submission to TRAI.

Late last month, TRAI proposed to eliminate tariffs for USSD-based mobile banking and payment services in a bid to protect the interest of feature phone users and boost digital financial inclusion.

The USSD is a service that uses a short code for making transactions or enquiries. Since it does not need a data connection, the service is used by many feature phone users to check balance in their bank accounts and to do peer-to-peer money transfers, cash withdrawals and deposits from banking correspondents in small towns and rural areas.

Vodafone Idea (Vi) said USSD services entail “both capex and operational costs in terms of network resources, IT/billing platforms, human resource, manual activities and upkeeping it as per regulatory and licensing norms”, adding that “costs per unit would be substantial” if volumes are considered. Whileinews

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