TRAI Unveils New Regulations to Transform Telecom Interconnection by 2027
New Regulatory Framework for Telecom Interconnection
New Delhi: On Tuesday, the Telecom Regulatory Authority of India (TRAI) announced the introduction of 'The Telecommunication Interconnection (Third Amendment) Regulations, 2026', set to take effect on January 1, 2027.
Interconnection in the telecom sector involves the technical, operational, and commercial agreements that link multiple telecom networks, enabling seamless communication between users of different service providers, as stated in an official announcement.
This amendment aims to modernize the current interconnection regulatory framework, aligning it with modern network designs and facilitating a shift from the existing interconnection at Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels to the Licensed Service Area (LSA) level.
Transitioning traffic to LSA-level Points of Interconnection (POIs) is expected to streamline routing, enhance the management of limited numbering resources, and provide advantages such as reduced latency and improved service reliability, according to the official statement.
The existing traffic measured in Minutes of Usage (MoUs) at LDCA/SDCA-level POIs will be transitioned to LSA-level POIs over a three-year period, in a phased approach. Following this, all traffic will be managed at the LSA or Service Area level POIs.
The new regulations mandate the establishment of IP-based interconnections by service providers. Any new interconnections formed after the regulations come into effect will be IP-based.
Current POIs operating on E1/TDM-based interconnections will also transition to IP-based interconnections within three years, in a phased manner. This migration is anticipated to enhance bandwidth efficiency, call quality, and overall call performance.
For IP-based interconnections, the maximum call-handling capacity at a POI will be determined based on the concurrent session-handling capability and link bandwidth, while ensuring the desired Quality of Service in line with TRAI's relevant regulations.
A new regulatory framework has been established for the surrender of POIs. Previously, regulations only allowed for the 'disconnection' of a POI, which halted traffic exchange at that point. This was typically initiated by a service provider due to issues with another provider.
In contrast, the surrender process is designed for voluntary relinquishment of a POI by a service provider for operational needs, such as decreased traffic, service withdrawal from a region, or traffic rerouting, thereby enhancing financial efficiency.
The existing bank guarantee framework remains intact; however, the validity period for bank guarantees has been extended from six months to twelve months upon reassessment. A new methodology for determining the ceiling on bank guarantees for POIs, including those for IP-based interconnections, has also been introduced.
A specific provision has been added to address late payments of interconnection charges. The interest rate will be mutually agreed upon by service providers, capped at the State Bank of India's one-year Marginal Cost of Funds-based Lending Rate (MCLR) plus two percent.
The amendment regulations outline reporting requirements to monitor the transition of traffic from LDCA/SDCA-level POIs to LSA-level POIs, as well as the migration from E1/TDM-based to IP-based interconnections.
To ensure effective implementation of these regulations, a structured financial disincentive framework has been established for violations. This revision aims to enhance the enforcement of the regulatory framework, making it more effective and proportionate to the nature and severity of the violations.
The provisions regarding interest on late payments, reporting requirements, and financial penalties will facilitate the effective enforcement of these regulations.