Thursday, 14 December, 2017

Telecom operators to seek legal help against TRAI's IUC slashing

Reliance Communications welcomes TRAI decision to slash IUC Telecom operators to seek legal help against TRAI's IUC slashing
Derrick Tucker | 20 September, 2017, 01:05

"Vodafone is already in court after Trai had reduced IUC to 14 paise a minute from 20 paise in 2015". As per reports, this move by the TRAI is likely to impact the overall calling charge largely.

The IUC had been the focus of bitter exchanges between new entrant Reliance Jio and incumbent operators such as Airtel and Idea Cellular.

Mobile companies now charge 14 paise a minute for allowing a domestic call from a rival operator to terminate on their network.

Late Tuesday, the Telecom Regulatory Authority of India lowered the interconnect usage charge, paid by the mobile operator originating a call to the network where it is received, to 6 paise a minute effective October 1 and chose to scrap the charge from January 1, 2020.

Termination charge or ICU is a fee that a mobile service provider pays to another to link a call to the latter's network. The IUC will be 6 paise per minute from October 1.

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 debate over the charge was revived in August a year ago, 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.

Older telecom firms wanted it to be raised to at least 30 paise, while Reliance Jio wanted it cut to zero.

Jio, on the other hand, wanted IUC to be waived, saying it will benefit consumers.

"Whilst mobile operators may seek to recover lost IUC revenues through higher retail charges to customers, in Indias intensely competitive market it is unlikely that they will be able to do so", Koong said.

Trai and Jio have contended that lowering interconnect charges will bring down tariffs. Telecom operators levy IUC on incoming calls from other networks and the charges are passed on to subscribers.

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