As expected, the sector regulator TRAI has reduced the IUC charges from the current 14 paise per minute to 6 paise per minute which should ideally see call rates to come drown.
This revised IUC charges will come to effect from 1 October, 2017.
“For Mobile to Mobile, termination charge has been reduced from 14 paisa per minute to 6 paisa per minute w.e.f. 1st October, 2017,” TRAI noted in its regulation.
For other calls like from mobile to fixed line, fixed to fixed and fixed to mobile, the IUC charges remain zero.
The regulator also said from 1 January, 2020, the ICU charges for mobile to mobile will also be made zero, means telecom operators in Indian will not have to pay any IUC charges.
IUC is a charge an operator from where a call is made pays to the other operator where the call lands or ends. For example if an Airtel customer makes a call to Jio, then Airtel has to pay Jio the recommended IUC.
Earlier, the telcos had to pay 14 paise per every minute of call but from October onwards they will have to pay 6 paise.
In an ideal scenario it is expected that the telcos will pass this benefit to the customers but looking at the current situation of the telcos, they may not do that.
While Reliance Jio would be happy with this development the incumbent telcos like Airtel, Vodafone and Idea would be too disappointed.
“We are disappointed with this decision and are now considering our options in response to it. The Indian telecoms industry is already experiencing the greatest period of financial stress in in its history. This is yet another retrograde regulatory measure that, unless mitigated, will have serious consequences for investment in rural coverage, undermining the Government’s vision of Digital India,” commented a Vodafone spokesperson.
“We are extremely disappointed with the latest regulation on the IUC, especially at a time when the industry is facing severe financial stress. The suggested IUC rate, which has been arrived at in a completely non-transparent fashion, benefits only one operator which enjoys a huge traffic asymmetry in its favour,” said a statement from Bharti Airtel, country’s largest telco.
This is because Jio was demanding TRAI to abolish the IUC regime and implement BAK, whereas the incumbents and their lobby group COAI, were asking the regulator to raise the ICU charges.
They were demanding the IUC charges be increased to at least 30 paise as, according to them, that was the cost they are incurring to maintain a terminating call on their network.