Vodafone Essar has approached telecom tribunal TDSAT challenging Trai's proposal to review the Interconnection Usage Charge (IUC) regime which may see end of the termination charge.

TDSAT today reserved the order after hearing both the parties -- Vodafone-Essar and Trai.

Phone companies pay IUC to one another for using each other's networks to complete calls. It involves three stages of a call -- origination, carriage and termination. Often, IUC changes affect consumer tariffs.

A Telecom Disputes Settlement and Appellate Tribunal (TDSAT) bench, headed by its chairman Justice S B Sinha, reserved its order.

Vodafone Essar contended that the consultation process of the Telecom Regulatory Authority of India (Trai) was not in conformity with the tribunal's earlier order.

The company, along with other incumbent operators, have been opposing the proposal of doing away with the termination charge, which one operator gets from another on whose network the call finally lands.

Currently, the termination charge is 20 paise per minute and is major revenue earner for old operators, as they have 90 per cent of the total subscribers with them.

However, the new operators are demanding an end to the termination charge, saying that the move will provide them a level playing field vis-a-vis the existing players.

Vodafone Essar's counsel Gopal Jain said that Trai has not followed the methodology prescribed by the tribunal in its earlier order, in which TDSAT had asked it to adopt cost-based methodology that includes capital expenditure.

"Correct principle and methodology to determine mobile termination charge is a cost-based methodology, which includes capital cost, and the regulatory body has to comply with the adjudicating body verdict in carrying out the exercise," Jain said referring TDSAT's September 29, 2010, direction.

He further said that the tribunal had asked Trai to review the termination charge, but not to commence a fresh exercise for determining it anew.

However, Trai opposed it, saying that TDSAT did not recommended any methodology for determining the termination charge. It also said that tribunal has asked it to decide termination charges afresh.

Trai had circulated a consultation paper on IUC review on April 29, seeking stake-holder views on whether it should be abolished.