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TRAI has notified the Telecommunication Interconnection (Third Amendment) Regulations, 2026, mandating IP-based interconnections for new connections and migrating traffic to Licensed Service Area-level points from January 1, 2027.
✦ AI SUMMARY 30-second read
- All new telecom interconnections established after January 1, 2027 must use IP-based technology; existing E1/TDM-based systems will migrate within three years.
- Traffic will shift from LDCA/SDCA-level to Licensed Service Area-level points of interconnection in a phased manner.
- A graded financial disincentive framework and revised bank guarantee provisions, including extension of validity and reassessment intervals from six months to 12 months, have been introduced.
Why it matters: The overhaul modernises India's telecom interconnection backbone, promising lower latency, better call quality and simpler network routing for operators and subscribers.
This summary was generated by AI. Editors may review and update it.
The Telecom Regulatory Authority of India (TRAI) has released the Telecommunication Interconnection (Third Amendment) Regulations, 2026, bringing sweeping changes to the framework that governs how telecom networks exchange traffic in the country. The regulations were notified on 3 November 2026 and will come into force on January 1, 2027.
Interconnection refers to the technical, operational and commercial arrangements that enable subscribers of different service providers to communicate with one another seamlessly. The amended rules affect how and where this traffic exchange takes place, the technology used and the financial obligations of service providers.
What was announced
TRAI has made IP-based interconnection mandatory for all new points of interconnection (POIs) established once the regulations take effect. Existing POIs that currently operate on E1/TDM-based systems will be transitioned to IP-based interconnection over three years through a phased process.
Alongside the technology shift, the regulations move the level at which traffic is handed over and received. Points of interconnection that currently operate at the Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels will be migrated to Licensed Service Area (LSA)-level POIs, also over a three-year phased period. Reporting requirements have been prescribed to monitor both migrations.
A new mechanism permits service providers to voluntarily surrender a POI for operational reasons such as reduced traffic, withdrawal of services from an area or traffic rerouting. Previously, the regulations only provided for disconnection in exceptional circumstances arising from disputes between operators.
Financial and compliance provisions
The existing bank guarantee framework has been retained but updated. The validity of bank guarantees furnished after reassessment, and the reassessment interval itself, have both been extended from six months to 12 months. TRAI has also revised the methodology for calculating the ceiling on bank guarantees, including those applicable to IP-based interconnection.
On delayed payments, the amended regulations set the applicable interest rate at a level mutually agreed upon by service providers, subject to a ceiling of the State Bank of India's one-year Marginal Cost of Funds-based Lending Rate plus two percentage points.
To strengthen enforcement, TRAI has introduced a graded financial disincentive framework for violations, designed to make penalties proportionate to the nature and seriousness of each contravention.
What it means for India
TRAI expects the shift to LSA-level POIs to simplify network routing and improve the management of numbering resources. The transition to IP-based interconnection is expected to improve bandwidth efficiency, call quality and end-to-end call performance.
For IP-based POIs, the maximum call-handling capacity will be determined by concurrent session-handling capability and link bandwidth, while prescribed Quality of Service standards must be maintained. Once migration is complete, all traffic will be handed over or received exclusively at LSA or Service Area-level POIs.
What happens next
Service providers will have until January 1, 2027 to align new interconnection arrangements with the amended regulations, while the three-year phased migration timelines for both technology and traffic-level transitions begin from that date.
Elets will update this story as further implementation details emerge.