News Worms
News Worms

Reliance Communications welcomes reduction in IUC by TRAI‍

Reliance Communications welcomes reduction in IUC by TRAI‍

Country's largest telco Bharti Airtel on Wednesday said it is dismayed with the TRAI's amended regulation that reduced the IUC charges to 6 paise from existing 14 paise per minute of a voice call.

" References to financial stress in the industry or the need for IUC to promote rural coverage again shows the attitude of the incumbent operators wherein IUC is being treated as a subsidy that the Indian customers must pay to sustain these operators financially", said the company in response to ET's email queries.

"We are extremely disappointed with the latest regulation on the IUC (interconnection usage charges), especially at a time when the industry is facing severe financial stress".

While a cutting the IUC rate, the authority added that the termination rates will be abolished from January 1, 2020.

The cellular operators association of India (COAI) has called the interconnect regulation disastrous and has chose to go to the court.

So far Reliance Jio, part of India's largest industrial house, has been paying Airtel, Vodafone, Idea, and other telecom operators interconnect charges.

The move to cut interconnection charges by as much as 57 per cent will to benefit mobile phone users while also helping to put an end to the long-pending issue of mobile IUC or termination charges.

In a decision that has disappointed incumbent telcos, TRAI has slashed the Interconnect Usage Charge (IUC) from 14 paise/ 6 paise/min. This will let companies get along with their job and dispel charges of favouring Jio over other players.

However, Jio pointed out that it has always offered free voice services to its customers. The justification offered by these operators is that they incur cost of IUC for off-net calls. The regulator has been actively reducing these fees over the last few years, but these charges act as a major source of income for the established which own these extensive networks.

It said that Airtel alone received about $75 million in interconnection revenue from Jio in April-June 2017.

"An operator with higher proportion of off-net incoming minutes over off-net outgoing minutes benefits by way of net inflow of IUC revenues, and vice-versa", Harsh Jagnani, Sector Head and Vice President, Corporate Ratings, ICRA said. They are saying that this move is disappointing for most of the telcos in the country. Now termination charges will be zero.

On its website, the regulator said that the move to the so-called Bill And Keep regime (where no interconnect charge is paid by a telecom firm to another) would "encourage flat rate billing and time differentiated charges, both of which will improve capacity utilization and will be in the interest of consumers".


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