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20 September 2017, 01:09 | Hattie Nash
TRAI revises IUC (Interconnect charges) to 6 paise/minute, effective Oct 1
In the letter, which was written before TRAI's decision was made public, the company showed concern at the potential introduction of a Bill-and-Keep (BAK) regime or a reduction in IUC. TRAI said the call termination charge will be applicable from next month.
New entrant Reliance Jio said that cost of delivering calls on new technologies is nearly negligible and incumbents continue to gain from IUC even after having recovered cost of their entire network. The IUC will be 6 paise per minute from October 1.
Telecom Regulatory Authority of India (Trai) said that the termination charge will be completely eliminated from January 1, 2020. The Interconnect Usage Charges (IUC) has been one contended issue, recently questioned by Reliance Jio, which termed IUC as an "artificial barrier".
Trai said it is of the view that termination charges work as disincentive to the deployment of new technologies such as VoLTE and migration to IP networks by operators.
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The IUC is a wholesale charge payable by a Telecom Service Provider (TSP) to another TSP for terminating or transiting/carrying a call from its network to the network of the receiving TSP.
The debate over the charge was revived in August past year, when Trai issued a consultation paper proposing to review it. Reliance Jio, the latest entrant in the telecom market, wanted the charge to be lowered and the existing calling-partypays regime eventually scrapped.
Industry analysts said the Trai move was negative for BhartiAirtel, Vodafone India and Idea Cellular, modestly positive for Anil Ambani-owned Reliance Communications and Aircel and beneficial for Reliance Jio. However, TRAI has been in support for reducing IUC charges off late. The reduction in interconnect usage charge will benefit Jio, for which the charge was a huge liability.
Established telecom operators have argued that every call on the network has a cost, and expenses of an incoming call on their network should be borne by the operator from whose network, the call has originated.
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