TRAI Slashes Call Connect Charge to 6 Paise Per Minute

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

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. ".if you reduce the termination charge, the principal beneficiary is Jio because they are the ones dumping traffic onto other networks". "Even if IUC was lowered by half a paise, it would have gone to court", said a senior industry executive.

Telecom Regulatory Authority of India (Trai) today announced slashing of the interconnection usage charge (IUC), paid by an operator for termination of mobile call on a rival network, to 6 paise a minute from the current 14 paise. The telecom regulator is planning to do away with interconnection charges entirely by January 1, 2020. A telecom operator presently charges 14 paise per minute for every incoming mobile call, called mobile termination charge (MTC), received from the other network.

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. The Interconnect Usage Charges (IUC) has been one contended issue, recently questioned by Reliance Jio, which termed IUC as an "artificial barrier". The existing operators have already been struggling because of the lowered revenue after huge cut downs in the prices of data packs and other telecom services.

Notably, the telecom disruptor Reliance Jio has been advocating lowering termination charges on grounds that it will benefit the customers.

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TOI was the first to report on the impending cut in IUC charges in its edition dated August 13.

"Lower termination charges are, therefore, likely to benefit consumers overall (both fixed and mobile) because operators will have greater retail pricing flexibility".

Khullar added that the coming days could see a replay of the events in 2007, when the IUC was reduced from 30 paise to 20 paise.

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