The Telecom Regulatory Authority of India (TRAI), on Friday, issued a new norm imposing five paisa as termination charge on each transactional short message service (SMS) and two paisa on each normal SMS on operators from whose networks the message originates.

The new regulation — Short Message Services (SMS) Termination Charges Regulations, 2013 — will be effective from June 1, 2013.

To date, the termination charge on SMS was under forbearance.

“The five paisa charge is already there for promotional messages. Now, it will be applicable for transactional messages also, which also falls under the category of commercial communications,” TRAI Member RK Arnold told reporters today.

The regulator had, on Thursday, discussed the issue with the chief executives of the telecom service providers. The meeting was attended by representatives from Sistema Shyam Teleservices, Bharti Airtel, Idea Cellular and Videocon, among others.

However, transactional SMSes originating from the Government organizations will be exempted from the termination charges, Arnold said.

The termination charge is paid by the operator on whose network the calls or SMS originates to the operator on whose network the communication ends. Termination charges have a direct link to the tariffs of voice calls and SMSes.

At present, some operators like Bharti, Vodafone and Idea Cellular charge a termination fee of 10 paisa per SMS based on bilateral agreement. However this move was not accepted by Reliance Communications, Tata Teleservices and Aircel who refused to pay the termination charges. The matter however then went to the court.

Telcos get about 18% of their revenue from value-added services, of which about 40% comes from SMS.

According to COAI the bigger telcos were earning about Rs 20 crore as termination charge from bulk and transactional SMSes annually. With the new TRAI norm, this will come down to Rs 10 crore. Big operators however did not have to pay much to each other as termination charges for individual SMS as they got neutralized.

That is because individual subscribers who sent a message to another subscriber in 90% of the cases get a reply. However earlier the newer operators refused to pay their loss from commercial and bulk SMS’s be partly compensated as they have to fork out some money as termination charges.

The new norm is expected to help the new telecom operators who had opposed the steep termination charge of 10 paisa saying that at an average SMS tariffs paid by customers is between 15 paisa and 25 paisa.

“In the previously forborne environment, large operators were using their clout to impose an SMS termination charge as high as 10 paisa on small operators interconnecting with them. This was getting reflected in high SMS tariffs for the consumers. The new SMS termination charge of 2 paisa set by TRAI will set right the prevalent market distortion, in the rightful interest of the Indian consumers,” Association of Unified Telecom Service Providers of India (AUSPI) secretary general Ashok Sud said in a statement.

On the other hand, if any subscriber is found to be using telecom service for unsolicited commercial communications will now face immediate disconnection, TRAI said today.

Name and address of such subscribers shall be entered into a blacklist and no resources would be allotted to these subscribers for a period of two years in such cases, said Arnold.

The regulator has amended the Telecom Commercial Communications Customer Preference Regulations 2013. In case of a valid complaint, the telecom operator shall disconnect all the telecom resources allotted to such subscriber, after due investigation. This provision comes into force with immediate effect, TRAI said in a statement.

“The moment a complaint is received by a service provider from a customer… It will immediately investigate into that complaint and if it finds the communication unsolicited, the regulations provides for immediate disconnection of that resource,” Arnold said.

The new provision will come into force within 30 days from the date TRAI publishes the notification.

“…There are many private persons who are sending the commercial messages to the subscribers…Now with this particular amendment…Resources of such subscribers will be disconnected,” Arnold said.

In November 2012, TRAI had said consumers would be charged not less than 50 paisa per SMS after a threshold of 100 a day. The TRAI directive came as part of the regulator’s endeavor to curb unsolicited SMS and calls, which continue to be a major problem even after imposing spam guidelines.