New Delhi: The Telecom Regulatory Authority of India (TRAI) has introduced new regulations to modernise the country's telecom infrastructure, improve call quality and make connectivity between different telecom networks more efficient. The Telecommunication Interconnection (Third Amendment) Regulations, 2026, will come into effect on January 1, 2027.

The new framework aims to simplify how telecom operators connect their networks and exchange calls and other traffic. It mandates a shift towards Licensed Service Area (LSA)-level points of interconnection (POIs) and the adoption of Internet Protocol (IP)-based technology.

Telecom interconnection allows customers of different service providers to communicate. For instance, when a person using one operator calls someone on another network, interconnection enables the call to pass between the two networks.

A key change is the transition to IP-based interconnection technology. All new interconnections established after the regulations take effect must use IP-based technology.

Existing connections operating on the older E1/TDM-based system will also be migrated to IP-based technology within three years.

IP-based interconnection uses Internet Protocol to transfer communication traffic between networks. The transition is expected to improve bandwidth efficiency, call quality and overall network performance. It will also help operators manage growing traffic as demand for mobile data and digital communication increases.

Telecom Networks To Shift To LSA-Level Connections

The amendment also changes the way telecom operators connect their networks. Currently, interconnection arrangements operate at the Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels.

Under the new framework, these arrangements will gradually shift to Licensed Service Area-level points of interconnection within three years.

A POI is a location where two telecom networks connect to exchange calls and other traffic. The transition is expected to simplify call routing, improve numbering resource management and reduce operational complexity for telecom operators.

The regulations also introduce a separate procedure for operators wishing to surrender a POI. While the earlier framework primarily provided for disconnection, including in exceptional circumstances such as disputes between service providers, the amended rules allow operators to surrender connections they no longer need voluntarily.

This could apply when call traffic declines, services are withdrawn from a particular area or traffic is redirected through another connection. The provision is expected to help operators manage their networks more efficiently and avoid unnecessary infrastructure costs.

Changes To Payment Rules, Penalties And Compliance

TRAI has also revised financial provisions governing interconnection between telecom operators.

The validity of bank guarantees submitted after reassessment, along with the reassessment interval, has been extended from six months to 12 months. The regulator has also revised the method for calculating maximum bank guarantee requirements for interconnection points.

The new regulations address delays in paying interconnection charges. Telecom operators will mutually decide the interest rate applicable to delayed payments, subject to a maximum of the State Bank of India's one-year Marginal Cost of Funds-based Lending Rate (MCLR) plus two percentage points.

TRAI has also introduced reporting requirements to monitor compliance with the regulations and a graded financial penalty framework for violations.

For consumers, the changes primarily aim to improve the underlying telecom infrastructure rather than introduce a new service. The transition to IP-based connections and simplified network arrangements is expected to improve call handling, network efficiency and service reliability. However, the actual benefits will depend on how effectively telecom operators implement the new framework.

The amendment is part of TRAI's broader efforts to update India's telecom infrastructure in line with technological developments and the growing demand for reliable communication networks.