New Delhi, 03 November (H.S.): The Telecom Regulatory Authority of India (TRAI) on Tuesday issued the Telecom Interconnection (Third Amendment) Regulations, 2026, introducing a series of changes aimed at modernising connectivity arrangements between telecommunications networks, promoting IP-based interconnection and improving the efficiency of traffic exchange among service providers. The amended regulations will come into effect on January 1, 2027.

According to TRAI, telecom interconnection refers to the technical, operational and commercial arrangements through which two or more telecommunications networks are connected, enabling subscribers of different service providers to communicate with one another seamlessly. Under Section 11(1)(b) of the TRAI Act, 1997, the regulator is empowered to prescribe the terms and conditions governing interconnection between service providers and ensure technical compatibility.

The amendment follows a comprehensive review of the existing regulatory framework. TRAI issued a pre-consultation paper on April 3, 2025, followed by a consultation paper on November 10, 2025, inviting comments and suggestions from stakeholders. A total of 17 stakeholders submitted their comments, while nine submitted counter-comments. An open-house discussion was also held on January 28, 2026. The revised regulations have been finalised after examining the feedback and analysing the recommendations received during the consultation process.

Under the amended framework, service providers will be permitted to mutually decide the locations for exchanging telecommunications traffic. At present, interconnection is primarily established at the Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels. This arrangement will gradually transition to the Licensed Service Area (LSA) level.

The shift is expected to simplify network routing, reduce latency and enhance service reliability. Traffic currently exchanged through interconnection points at the LDCA and SDCA levels will have to be migrated to the LSA level in a phased manner within three years.

The amended regulations also mandate IP-based interconnection for all new connections. Existing E1/Time Division Multiplexing (TDM)-based interconnection arrangements will likewise have to be migrated to IP-based systems in a phased manner within three years. According to TRAI, the transition will facilitate more efficient utilisation of bandwidth while improving call quality and overall network performance.

The amendment further introduces a framework for determining capacity requirements at IP-based interconnection points. The maximum call-handling capacity at an interconnection point will be assessed on the basis of the number of concurrent sessions it can support and the available link bandwidth. Service providers will also be required to comply with the prescribed quality-of-service standards.

Another significant change concerns the voluntary surrender of interconnection points. Earlier, the regulations provided only for the closure of an interconnection point, effectively discontinuing traffic exchange through it. The revised framework now allows service providers to surrender interconnection points in response to operational requirements, including declining traffic volumes, withdrawal of services from a particular area or changes in traffic-routing arrangements.

The amendment also revises provisions relating to bank guarantees. While the existing bank guarantee framework will remain in place, the validity period of bank guarantees furnished following reassessment, as well as the interval for their reassessment, has been extended from six months to 12 months. A revised mechanism has also been introduced to determine the maximum permissible bank guarantee limit for interconnection points.

In addition, the amended regulations provide for interest on delayed payments of interconnection charges or charges associated with their utilisation. The applicable interest rate will be determined through mutual agreement between service providers, subject to an upper limit of two percentage points above the State Bank of India’s one-year Marginal Cost of Funds-based Lending Rate (MCLR).

TRAI has also introduced reporting requirements to monitor the migration of traffic from LDCA/SDCA-level interconnection points to the LSA level and the transition from E1/TDM-based systems to IP-based interconnection. A graded financial penalty framework has been prescribed for violations of the amended regulations.

The amendments are intended to facilitate the transition towards a more modern, efficient and technology-driven telecom interconnection framework, while strengthening network performance and ensuring smoother connectivity between service providers.

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Hindusthan Samachar / Jun Sarkar