TRAI revises IUC (Interconnect charges) to 6 paise/minute, effective Oct 1


"At that point, IUC was reduced from 30 to 20 (paise) and these guys went to my greatest fear is once again, you are looking at litigation and that is not good for this industry", he said.

The Trai, in its explanatory memorandum, said: "While on the one hand, a lower termination charge benefits the consumer, it does not have a negative effect on the telecom operator because it is open to the operator to recover whatever costs it incurs through the retail tariffs, subject to competitive market conditions".

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.

Mobile calls are now likely to cost less as the Telecom Regulatory Authority of India (TRAI) on Tuesday made a decision to cut interconnection usage charge (IUC) to 6 paise per minute from 14 paise earlier.

The IUC is a wholesale charge payable by a Telecom Service Provider (TSP) to another TSP for terminating or transiting/carrying a call from its network to the network of the receiving TSP.

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Telecom Regulatory Authority of India (Trai) today announced slashing of the interconnection usage charge (IUC), paid by an operator for termination of mobile call on a rival network, to 6 paise a minute from the current 14 paise.

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".

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, which has built up a subscriber base of 128 million since it started commercial operations last September on the back of its offer of free voice calls, had wanted the interconnect usage charge (IUC) cut to zero.

Notably, the telecom disruptor Reliance Jio has been advocating lowering termination charges on grounds that it will benefit the customers.