Telecommunication Tariff (Sixty Eighth Amendment) Order, 2022 · F. No. C/(5)/2021-FEA-II

TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART III, SECTION 4

TELECOM REGULATORY AUTHORITY OF INDIA

NOTIFICATION

New Delhi, the 7th April, 2022

F. No. C/(5)/2021-FEA-II ---- In exercise of the powers conferred upon it under sub-section (2) of section 11, read with sub-clause (i) of clause (b) of sub-section (1) of the said section, of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997), the Telecom Regulatory Authority of India hereby makes the following Order further to amend the Telecommunication Tariff Order, 1999, namely:-

THE TELECOMMUNICATION TARIFF (SIXTY EIGHTH AMENDMENT) ORDER, 2022 (No. 3 of 2022)

1. Short title, extent and commencement:

• (1) This Order may be called the Telecommunication Tariff (Sixty Eighth Amendment) Order, 2022.
• (2) It shall come into force from the date of its publication in the Official Gazette.

2. In Schedule II to the Telecommunication Tariff Order, 1999, under item (8), for sub-item (8.a), the following sub-item and entry relating thereto shall be substituted, namely: -

(Dr. M.P. Tangirala) Pr. Advisor (F&EA)

Note 1 – The Telecommunication Tariff Order, 1999 was published in the Gazette of India, Extraordinary, Part III, Section 4 under notification No. 99/3 dated 9th March, 1999, and subsequently amended as given below: -

Note 2 – The Explanatory Memorandum explains the objects and reasons for the Telecommunication Tariff (Sixty Eighth Amendment) Order, 2022.

EXPLANATORY MEMORANDUM

1. The Telecom Regulatory Authority of India (hereinafter referred to as the Authority) is established under the Telecom Regulatory Authority of India Act, 1997 (TRAI Act). Section 11(2) of the TRAI Act inter alia states: “Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the Authority may, from time to time, by order, notify in the Official Gazette the rates at which the telecommunication services within India and outside India shall be provided under this Act including the rates at which messages shall be transmitted to any country outside India” thereby empowering the Authority to notify rates for various telecommunication services.

2. In exercise of these powers, the Authority has been notifying tariffs for various telecommunication services including Unstructured Supplementary Service Data (USSD) based mobile banking and payment service. The tariffs for USSD based mobile banking and payment service have been regulated in the form of ceiling tariffs prescribed by the Authority under item (8) of Schedule II of the Telecommunication Tariff Order 1999, as amended from time to time. The purpose of the present amendment to the TTO is to revise the framework for USSD based mobile banking and payment services. This explanatory memorandum aims to provide the rationale and reasons for issuing this amendment.

3. In December, 2011, Department of Financial Services (DFS) was allocated USSD code *99# by the Department of Telecommunication (DoT) for mobile banking services through the USSD gateway of National Payment Corporation of India (NPCI). In April, 2012, TRAI mandated that every Telecom Service Provider (TSP) should facilitate the banks to use USSD to provide banking services to its customers in not more than two stage entry of options in the case of USSD. In November, 2012, NPCI launched a USSD Gateway (National Unified USSD Platform) for enabling mobile banking through the USSD channel. In 2013, the Authority through the Mobile Banking (Quality of Service) (Amendment) Regulations, 2013, increased the maximum number of stages for completing a mobile banking transaction from two to five, primarily to increase the number of banking services available to USSD consumers.

4. The Authority through Telecommunication Tariff (Fifty Sixth Amendment) Order, 2013, prescribed a ceiling tariff of Rs. 1.50 per USSD session for USSD-based mobile banking service and established a framework to facilitate the agents of the banks to interface with the access service providers for use of USSD to provide mobile banking services. Further, with a view to facilitate mobile banking through USSD for financial inclusion, the Authority reduced the USSD- based ceiling tariff for banking and payment services from Rs. 1.50 to Rs. 0.50 per session through the Telecommunication Tariff (Sixty First Amendment) Order, 2016 and increased the number of stages from five to eight stages per USSD session through the Mobile Banking (Quality of Service) (Second Amendment) Regulations, 2016. The Authority also suggested various mechanisms viz., improvement in software features, design of user-friendly menu, increase in consumer awareness, developing Unified USSD platform to support transactions across all payment platforms to the NPCI/Banks to increase usage and popularity of this service.

5. Subsequently, the Reserve Bank of India (RBI) constituted a High-Level Committee on Deepening of Digital Payments (CDDP) with the objective of encouraging digitization of payments and enhancing financial inclusion through digitization. The committee recommended further rationalization of USSD charges to increase its adoption and popularity. RBI urged the Authority for a follow-up action on the recommendations made by CDDP and provide the required regulatory framework for the same.

6. Government of India, Department of Financial Services (DFS) also supported the recommendations made by the High-Level Committee and requested for waiving off USSD charges to facilitate faster adoption of this service by common people especially in rural/ difficult areas, the segment of population for whom the Pradhan Mantri Jan Dhan Yojana (PMJDY) Accounts scheme has been established to promote financial inclusion. Following a request from the DFS in this regard, the Authority initiated a consultation process to further rationalize USSD charges.

7. Accordingly, the Authority issued draft Telecommunication Tariff (66th Amendment) Order, 2021 on 24th November, 2021 proposing “Nil” charges per USSD session for mobile banking and payment service. The comments and counter comments on the draft Order were sought from the stakeholders by 8th December, 2021 and 17th December, 2021 respectively. In response, one association, four service providers and one organization furnished their comments and one organization submitted its counter comment.

8. Some stakeholders have contended that since USSD transactions make use of their network and infrastructure, they incur capex investment as well as operational expenditure in providing this service. They further argued that in case this service is made free of cost, they must be adequately compensated for this expenditure by banks through NPCI. Additionally, a few stakeholders suggested that in case USSD charges are removed then the regulatory obligations related to this service should also be done away with.

9. One stakeholder also suggested that the charges for USSD should be brought down in a phased manner to ascertain any direct correlation between the revised pricing and uptake of the USSD services.

10. Some stakeholders have favored the removal of charge to aid digital financial inclusion.

11. In order to rationalize USSD charges to bring them in line with other services, the present level of tariffs for the major services being offered by the TSPs was examined. The present level of tariffs for wireless service for the quarter ended September, 2021 is indicated in the Table below: