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TRAI has capped IP-based telecom interconnection charges and ordered a phased shift away from outdated network technology.
The Telecom Regulatory Authority of India (TRAI) has introduced new limits on charges telecom operators levy on one another for internet protocol (IP) connections between their networks. The regulations, announced on November 9, 2026, will take effect on January 1, 2027.
Under the Telecommunication Interconnection (Port Charges) (Third Amendment) Regulations, 2026, operators can charge a maximum of ₹5.6 lakh annually for a 1 Gbps IP port and ₹42.3 lakh for a 10 Gbps port.
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Why Has TRAI Revised Interconnection Charges?
The regulator’s decision forms part of a broader effort to replace older E1 and Time Division Multiplexing (TDM) technology used to connect telecom networks. Although operators increasingly carry 4G and 5G calls through IP-based systems internally, many continue using traditional E1 ports to exchange traffic with other networks.
According to TRAI, this combination of technologies contributes to delays, affects call quality and increases operating costs. Industry stakeholders also highlighted difficulties maintaining ageing TDM equipment, including limited availability of replacement hardware, technical support and trained personnel.
A separate amendment requires all new interconnections to use IP technology, while existing E1 connections must migrate within three years of the regulations taking effect.
How Will the New Port Charges Work?
The revised regulations expand the definition of a telecom port to include IP connections measured in Mbps or Gbps, alongside traditional E1 ports operating at 2.048 Mbps. Existing charges will continue to apply only to E1 ports. Operators may negotiate lower IP port charges, while pricing for capacities other than 1 Gbps and 10 Gbps must follow a transparent calculation methodology consistent with TRAI’s approach. The regulator has also established uniform charges across mobile, fixed-line, national long-distance and international long-distance services.
TRAI rejected proposals for separate service-specific rates, explaining that IP ports carry different categories of telecommunications traffic through the same infrastructure.
What Penalties Apply for Non-Compliance?
The amended regulations introduce financial penalties for telecom operators that fail to meet prescribed reporting deadlines. Violations may attract penalties of up to ₹25,000 per day during the first 15 days and up to ₹50,000 daily thereafter. The maximum penalty is capped at ₹15 lakh per service area for each violation.
Operators must receive an opportunity to be heard before penalties are imposed. TRAI also retains the authority to reduce or waive penalties depending on the circumstances. Any penalty remaining unpaid after 21 days will attract interest calculated at two percentage points above the State Bank of India’s one-year Marginal Cost of Funds Based Lending Rate (MCLR).
The revised framework establishes standardised pricing for modern interconnection infrastructure while setting a transition period for retiring legacy systems. The changes are intended to support the migration towards IP-based telecommunications networks and address operational difficulties associated with maintaining older interconnection technology.
