TRAI Slashes Call Connect Charge to 6 Paise Per Minute

Lena Tucker
September 20, 2017

New entrant Reliance Jio said that cost of delivering calls on new technologies is nearly negligible and incumbents continue to gain from IUC even after having recovered cost of their entire network.

Trai said in a statement: "For mobile to mobile, the termination charge has been reduced from 14 paisa per minute to 6 paisa per minute with effect from October 1, 2017".

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.

Jio, on the other hand, wanted IUC to be waived, saying it will benefit consumers. The older telecom players wanted it raised to at least 30 paise per minute.

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.

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Trai said it is of the view that termination charges work as disincentive to the deployment of new technologies such as VoLTE and migration to IP networks by operators.

Reliance Jio had said in a presentation to Trai recently that telecom operators gained to the tune of Rs 1 lakh crore from IUC.

"Whatever the Trai does, another court battle is on the cards". 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.

Trai and Jio have contended that lowering interconnect charges will bring down tariffs.

He said that introducing a BAK regime or reducing the IUC at this juncture would "simply mean that there is less revenue available to mobile operators to finance both their existing and future investments". Jio also stated that it is of the opinion that waiving the charge will benefit consumers.

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