What’s a Telecom Tariff?

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A telecommunications tariff is a document that must be submitted by a communications provider to the regulatory body for its area of ​​business. This document outlines the types of services the carrier will offer, along with the rates it intends to charge. The tariff also designates the rights that the company will grant to its customers, as well as the obligations of both parties in any agreement.

Typically, carriers are required to submit a telecom rate for both state or provincial approval, as well as federal approval. These documents are reviewed and have no force or effect until officially approved. Often, this review process includes public input. Although it has a general telecommunications rate with a federal government, rate rules and regulations can vary widely from state to state, even for the same company.

This type of tariff should not be confused with an import or export tariff, which is an additional tax levied on goods entering or leaving a country by that country’s government. These types of tariffs are intended to generate revenue for the government or to prevent certain goods from being imported. While there may be those specifically intended for telecom goods, a telecom tariff is simply a document used by a carrier to state how much it will charge a consumer to use its products and services.

With the advent of many new telecom companies, the so-called tariff wars began. This is especially popular in India, where cellular and data rates are already extremely low. Pre-existing wars, coupled with the influx of new companies, have led some companies to rewrite their rate documents on an almost daily basis.

In a rate war, companies try to keep as large a customer base as possible by offering promotions or special rates. Some examples of this include the advent of billing by the second, rather than by the minute, and the cost reduction of roaming charges, which are levied when a cellular device is used outside the provider’s coverage area. Per-second billing can significantly reduce costs over the per-minute system, since, under the old system, any use of the device, no matter how short, would incur a one-minute charge. A per-second billing structure is often more accurate and cheaper.

Most governments post telecommunications tariff documents on their websites, for public review. If necessary, hard copies can also be obtained. The goal in requiring carriers to submit telecom rate plans is to have a clear list of rates and regulations, in case of a dispute.

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