New Delhi [India], November 3 : The Telecom Regulatory Authority of India (TRAI) on Tuesday released the Telecommunication Interconnection (Third Amendment) Regulations, 2026, which will come into effect on January 1, 2027, according to a statement issued by the Ministry of Communications.
Telecommunication interconnection refers to the technical, operational and commercial arrangements that enable different telecom networks to exchange traffic, allowing subscribers of various service providers to communicate seamlessly, the release said. 
Under the amended regulations, telecom service providers will be allowed to mutually agree on locations for exchanging telecom traffic, facilitating a shift from the existing Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels to the Licensed Service Area (LSA) level. The move is expected to simplify traffic routing, reduce latency and improve service reliability. Existing traffic at LDCA- and SDCA-level points of interconnection (POIs) will be migrated to LSA-level POIs in a phased manner within three years.
“The amendment regulations provide for establishment of IP-based interconnection by service providers. All new interconnections established after these regulations come into force shall be IP-based interconnections,” it said.  
Meanwhile, existing E1/TDM-based interconnections must migrate to IP-based systems within three years. The transition is aimed at improving bandwidth efficiency, call quality and overall network performance. For IP-based interconnections, call-handling capacity will be determined based on concurrent session-handling capability and link bandwidth, while maintaining prescribed quality-of-service standards.
TRAI has also introduced a framework for the voluntary surrender of POIs, allowing service providers to surrender interconnection points based on operational requirements, including reduced traffic, withdrawal of services or traffic rerouting. Additionally, the validity of bank guarantees furnished on reassessment and the reassessment interval have been extended from six months to 12 months, alongside a revised methodology for determining bank guarantee ceilings.
To address delayed payments of interconnection-related charges, the regulator has introduced an interest provision under which rates will be 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 (MCLR) plus two percentage points.
The amended regulations also prescribe reporting requirements to monitor traffic migration to LSA-level POIs and the transition to IP-based interconnection. A graded framework of financial disincentives has been introduced to ensure compliance, with penalties proportionate to the nature and seriousness of regulatory violations.
“Section 11(1)(b) of the TRAI Act, 1997, inter alia, empowers TRAI to prescribe the terms and conditions of interconnection between service providers, and ensure technical compatibility and effective interconnection between different service providers,” the Ministry said. 
To keep the existing regulatory framework relevant, transparent and conducive to efficient interconnection, TRAI initiated a review of the regulations governing interconnection through a pre-consultation paper issued on April 3, 2025.
After seeking stakeholders' feedback on the Telecommunication Interconnection Regulations, 2018, TRAI issued a consultation paper on November 10, 2025, incorporating inputs received during the pre-consultation process.