Airtel, Voda, Idea to move court on IUC cut

Phone calls to be cheaper as TRAI slashes call connection cost

"Vodafone is already in court after Trai had reduced IUC to 14 paise a minute from 20 paise in 2015". TRAI said the call termination charge will be applicable from next month.

Interconnect charges have become a big bone of contention between Reliance Jio and Aircel, on the one hand, and the other telecom players, including Tata Teleservices, Idea, Airtel and Vodafone, on the other.

Trai today announced that this charge, called Interconnection Usage Charge or IUC, will be 6 paise per minute from October 1 and will be made nil from January 2020 onwards.

Notably, the telecom disruptor Reliance Jio has been advocating lowering termination charges on grounds that it will benefit the customers. These three telecom providers demanded to increase the interconnect usage charges (IUC) to 30 paise per minute. The telecom regulator is planning to do away with interconnection charges entirely by January 1, 2020.

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The move comes as a major win for Reliance Jio which wanted IUC to be slashed to zero. The companies have, however, been countered equally aggressively by Mukesh Ambani's Reliance Jio, a company that heralded the new dirt-cheap tariff regime September past year when it launched its services with life-time free voice calling and very-low data tariffs.

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.

The letter, accessed by BusinessLine, says that introducing a BAK regime or reducing the IUC in India is likely to have adverse consequences for investment and ultimately, it will be to the detriment of consumers.

"Lower termination charges are, therefore, likely to benefit consumers overall (both fixed and mobile) because operators will have greater retail pricing flexibility". Charges levied for interconnecting mobile calls are at the centre of the IUC issue.

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