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TRAI's third amendment to its 2018 interconnection regulations requires all new interconnections to be IP-based from 1 January 2027 and shifts traffic exchange from local charging areas to licensed service area level.
✦ AI SUMMARY 30-second read
- All new interconnections established after 1 January 2027 must be IP-based; existing E1/TDM-based links must migrate within three years.
- Traffic exchange points are to consolidate from SDCA/LDCA level to LSA level, reducing interconnection points from roughly 3,000 to 22.
- Bank guarantee validity and reassessment intervals double from six months to twelve months, cutting recurring compliance costs for operators.
Why it matters: The shift to IP-based, LSA-level interconnection is expected to cut operator costs, reduce call drops and deliver faster call setup for consumers.
This summary was generated by AI. Editors may review and update it.
Document details
| Document type | Rules & Regulation |
|---|---|
| Issued by | CERT-In / DoT / TRAI |
| Region | India |
| Published | 15 November 2026 |
The Telecom Regulatory Authority of India issued The Telecom Interconnection (Third Amendment) Regulations, 2026 on 3 November 2026. The regulation amends the Telecommunication Interconnection Regulations, 2018 and carries an effective date of 1 January 2027.
The amendment has drawn mixed reactions across the telecom industry. Some operators and observers have welcomed it as an overdue modernisation, while others have flagged the financial burden it may place on cash-strained service providers such as Vodafone Idea and BSNL/MTNL.
What the document says
The most consequential provision requires that all new interconnections formed after 1 January 2027 be IP-based. Operators with existing E1/TDM-based interconnections must migrate those links to IP within three years. Similarly, existing Points of Interconnect at the SDCA and LDCA level must be migrated to the LSA level within three years, in a phased manner.
For IP-based Points of Interconnect, capacity will be assessed by considering concurrent session-handling capability, available link bandwidth, and compliance with prescribed Quality of Service requirements. A new voluntary surrender mechanism allows operators to relinquish a Point of Interconnect for operational reasons such as reduced traffic, service withdrawal from an area, or changes in routing arrangements.
On financial matters, the validity of reassessed bank guarantees rises from six months to twelve months, and the reassessment interval moves in step. A revised methodology governs the ceiling on bank guarantees for IP-based interconnection. Where interconnection charges are paid late, interest must be mutually agreed between operators but cannot exceed the State Bank of India's one-year MCLR plus two percentage points.
Operators must submit prescribed reports to TRAI to allow monitoring of both migrations. A graded financial disincentive framework is introduced for contraventions, intended to make enforcement proportionate to the seriousness of a violation.
Who is affected
All Telecom Service Providers operating in India are subject to the new rules. The impact, however, varies by operator. Jio, which already runs an all-IP network, stands to gain directly in operating expenditure by reducing interconnection points as traffic consolidates at the LSA level. Airtel carries some legacy TDM infrastructure and may offset capital replacement costs with operational savings.
Vodafone Idea faces the steeper challenge: its relatively larger legacy TDM footprint will require capital investment over the next two to three years, and the company may need to bring in new investors to fund that transition. BSNL and MTNL face a similar technological task but, as government-controlled entities, may be less exposed to the same capital constraints.
Network equipment vendors and telecom infrastructure providers are expected to see increased demand for IP-based interconnection equipment, gateways, network management systems, and IP transport services. Consumers are the intended end-beneficiaries, with the regulation aimed at reducing call drops, speeding up call setup, and improving overall network reliability.
Background
TRAI first addressed interconnection charging in 1999, with the Register of Interconnect Agreements Regulations and the Telecommunication Interconnection (Charges and Revenue Sharing) Regulations issued that year. Those frameworks governed network traffic exchange, port charges, and revenue sharing among operators during the early growth of India's private telecom market.
The Telecommunication Interconnection Regulations, 2018 replaced earlier rules, with a first amendment on Points of Interconnect provisioning following in July 2018. A second amendment in 2020 focused on simplifying the framework for Public Switched Telephone Networks and their interface with National Long Distance networks. The current SDCA/LDCA-based arrangement has been described as effectively obsolete, given that interconnection charging is now uniform at the national level rather than distance-based.
What happens next
The regulations take effect from 1 January 2027. From that date, no new TDM-based interconnection may be established. Operators have three years from the effective date to complete both the migration of legacy TDM links to IP and the consolidation of SDCA/LDCA-level Points of Interconnect to LSA level.
Mandatory reporting obligations will keep TRAI informed of progress on both migration tracks throughout the transition period. The graded disincentive framework provides the authority with graduated enforcement tools should operators fall short of compliance milestones.