Sci-tech

IUC cut disastrous, incumbent telcos may move court: COAI

IUC cut disastrous, incumbent telcos may move court: COAI

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. While the new charges come into effect from October, the regulator has even laid the foundation to do away with the IUC altogether: the charges have been ordered to go down to zero from January 1, 2020. It is a negative for incumbent operators like Bharti Airtel and Vodafone because being bigger operators a large chuck of calls will be terminating on the networks of Bharti Airtel and Vodafone. TRAI stated that the increased usage among the masses will help the telecom companies recover the losses incurred by reducing IUC charges. Reliance Jio said in July that India's top three telecom firms earned Rs1.04 trillion in the past five years by not implementing a 2011 regulatory road map to cut IUC to zero.

Mobile companies now charge 14 paise a minute for allowing a domestic call from a rival operator to terminate on their network.

Experts pegged the benefit to Jio from this decision at Rs 5,000 crore annually.

More news: Global hunger on the rise for the first time in a decade

Newcomer Reliance Jio, which has been aggressively selling its services by offering deep discounts and free handsets, has sought lower interconnect charges as its subscribers make more calls to rival networks while paying lower rates.

Established telecom operators have argued that every call on the network has a cost, and expenses of an incoming call on their network should be borne by the operator from whose network, the call has originated. "Operators would be able to offer consumers a wider variety of retail packages and tariff structures", Trai said in its explanatory memorandum, issued today as part of the regulation.

Reduction in mobile call connection charges will have an adverse impact on investments and sustainability of the telecom sector in the country, Singapores telecom major SingTel said in a letter to communications minister Manoj Sinha.


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