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

Herbert Rhodes
September 20, 2017

"It has been observed that reducing termination rates (IUC) has benefitted consumers and enhanced competition". ".if you reduce the termination charge, the principal beneficiary is Jio because they are the ones dumping traffic onto other networks".

Airtel, Vodafone, Idea and other incumbent telecom operators have even been calling for an increase in interconnection charges and even benchmarking them according to the actual cost.

The Telecom Regulatory Authority of India (TRAI) on Tuesday chose to reduce the interconnect charge from 14 paise per minute to 6 paise per minute.

TRAI announcing the new call termination charge said it will be applicable from October 1, 2017, and from January 1, 2020, it will be completely eliminated.

Domestic termination charges is the amount paid by the telecom operator whose user begins the call. The IUC will be 6 paise per minute from October 1.

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The IUC mainly consists of termination charges, originating charges and carriage/transit charges.Interconnection allows subscribers, services and networks of one service provider to be accessed by subscribers, services and networks of the other service providers.

The telecom regulator had reduced the interconnect charges in 2015 to just 14 paise a call, much to the chagrin of state-run entities BSNL and MTNL as it reduced their revenues drastically.

Trai and Jio have contended that lowering interconnect charges will bring down tariffs. The reduction in interconnect usage charge will benefit Jio, for which the charge was a huge liability.

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.

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.

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