The Nepal Telecommunications Authority has slashed the interconnection usage charge, the fee that one phone company pays to another when a call is made between their two networks, from 54 paisa to 10 paisa per minute.

As per the Interconnection Guideline 2019, service providers are required to implement the new charges by mid-March.

The interconnection usage charge has been fixed at 20 paisa per minute for a call between two landlines, 10 paisa per minute for a call from a landline phone to a mobile phone, 20 paisa per minute for a call from a mobile phone to a landline phone, and 10 paisa per minute for a call between two mobile networks, according to the new guideline.

Min Prasad Aryal, director of the Nepal Telecommunications Authority, said that the authority introduced the new charges to reduce the financial burden on customers when making calls from one network to another.

"We hope that the reduction in the interconnection usage charge will be passed on to the customer with operators decreasing their tariff,” he said. Aryal added that following the decrease in interconnection usage charges, operators should decrease their rates as it will lower their investment cost.

The interconnection usage charge when sending SMS messages has also been slashed to 10 paisa per SMS from 27 paisa.

The Interconnection Guideline 2019 was issued in mid-January, and telecom operators have been given three months' time to implement it effectively, said Sandip Adhikari, deputy director of the authority.

The latest guideline has also made changes to the incoming international interconnection usage charge which will be decreased gradually within eight years starting from Rs8 per minute this year. It will be decreased to Rs1.86 per minute within eight years.

As per the guideline, the charge will be applicable even if both subscribers use the same network. If the called party subscriber and international gateway operator are different, up to 25 percent of the mentioned international interconnection usage charge shall be received by the international gateway operator.

Aryal said that the reduced charges will allow subscribers belonging to different service providers to call each other without having to worry about paying high extra charges.

Currently, making calls between two different networks is expensive even if operators have sharply reduced the tariff for making calls within the same network.