The Telecom Regulatory Authority of India (TRAI) has issued the Telecommunication Interconnection (Third Amendment) Regulations, 2026, introducing changes to network connectivity, IP-based interconnection and related regulatory requirements.
The new regulations will come into effect on January 1, 2027. They aim to update the existing interconnection framework to reflect technological advancements and improve the efficiency of communication between different telecom networks.
Telecommunication interconnection refers to the technical, operational and commercial arrangements that connect two or more telecom networks. These arrangements allow telecommunications traffic to flow between networks and enable users of different service providers to communicate seamlessly.
Under Section 11(1)(b) of the TRAI Act, 1997, TRAI is empowered to prescribe the terms and conditions of interconnection between service providers and ensure technical compatibility and effective connectivity between their networks.
TRAI Reviews Existing Interconnection Regulations
TRAI initiated a review of its existing regulatory framework through a pre-consultation paper titled Review of the Existing TRAI Regulations on Interconnection Matters, issued on April 3, 2025. Stakeholders were invited to submit comments on several issues, including the Telecommunication Interconnection Regulations, 2018.
Following this process, TRAI issued a consultation paper on November 10, 2025, incorporating background information and stakeholder feedback received during the pre-consultation stage. After an extension, the final dates for submitting written comments and counter-comments were December 15 and December 29, 2025, respectively.
Seventeen stakeholders submitted comments on the consultation paper, while nine submitted counter-comments. TRAI also conducted an Open House Discussion on January 28, 2026. Following an analysis of the feedback received, the authority finalised the third amendment regulations.
Key Changes Under the Third Amendment Regulations
The amendment introduces several changes to the existing framework governing telecom interconnection.
1. Interconnection at the Licensed Service Area level
The new regulations allow interconnection providers and seekers to mutually agree on locations for handing over or receiving telecommunications traffic. The framework facilitates a transition from interconnection at the Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels to the Licensed Service Area (LSA) level.
Moving traffic handovers to LSA-level points of interconnection (POIs) is expected to simplify routing, improve the management of scarce numbering resources, reduce latency and enhance service reliability.
2. Migration of existing traffic to LSA-level POIs
Existing traffic, measured in Minutes of Usage (MoUs), at LDCA- and SDCA-level POIs must be migrated to LSA-level POIs within three years. The transition will take place in phases. After the migration, all traffic will be handed over or received through LSA- or Service Area-level POIs.
3. Transition to IP-based interconnection
The amendment requires all new interconnections established after the regulations come into force to use IP-based technology.
Existing POIs operating through E1 or Time Division Multiplexing (TDM)-based interconnection must also migrate to IP-based interconnection within three years, following a phased approach. This transition is expected to improve bandwidth efficiency, call quality and end-to-end call performance.
4. Capacity augmentation for IP-based interconnection
For IP-based interconnection, the maximum call-handling capacity at a POI will be determined by considering its concurrent session-handling capability and link bandwidth. The capacity must also maintain the required Quality of Service under relevant TRAI regulations.
5. New procedure for voluntary surrender of POIs
TRAI has introduced a specific regulatory framework for the surrender of POIs. Previously, the regulations provided for the disconnection of a POI, which stops the exchange of traffic due to exceptional circumstances arising from differences between service providers.
The new surrender procedure addresses voluntary closure of a POI by a service provider for its own operational requirements. Reasons may include declining traffic, withdrawal of services from an area or traffic rerouting. The change is intended to improve financial efficiency.
6. Revised bank guarantee provisions
The existing bank guarantee framework has been retained, but the validity period of guarantees furnished following reassessment and the interval between reassessments have been extended from six months to twelve months.
TRAI has also introduced a revised methodology for determining the ceiling on bank guarantees for POIs, including those using IP-based interconnection.
7. Interest on delayed interconnection payments
The amendment introduces a provision covering delays in the payment of interconnection charges and interconnection usage charges. Service providers may mutually agree on the applicable interest rate, 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.
8. Additional reporting requirements
Service providers will have to comply with reporting requirements to monitor the migration of traffic from LDCA- and SDCA-level POIs to LSA-level POIs. The reporting framework will also track the transition from E1/TDM-based to IP-based interconnection.
9. Graded financial disincentives
The amendment introduces a graded framework of financial disincentives for violations of the regulations. The revised approach is intended to make enforcement more effective and proportionate to the nature and seriousness of each contravention.
New Rules Aim to Strengthen Telecom Network Connectivity
The provisions covering delayed payment interest, reporting requirements and financial disincentives are intended to support effective implementation and enforcement of the amended regulations.
By aligning interconnection rules with technological developments and changes in the telecom sector, TRAI aims to strengthen connectivity between service providers and facilitate seamless communication across networks. The framework also seeks to provide greater regulatory certainty while maintaining effective interconnection, transparency, non-discrimination and fair competition.
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