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

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TRAI fixes IUC that has several components. "Trai's latest cut will naturally find its way to court as well", said a senior executive at one of India's leading telcos.

The industry body represents top telcos Bharti Airtel, Vodafone India and Idea Cellular, which seek a higher IUC, and Reliance Jio Infocomm, which favours doing away with the charge.

Koong said that when mobile operators decide on investment levels they anticipate IUC for terminating traffic on their network.

Prior to the Telecom Regulatory Authority of India' decision on Tuesday to cut mobile interconnect usage charges (IUC), Singapore Telecommunications Ltd (Singtel), one of the largest investors and stakeholders in Bharti Airtel, had written a letter to Telecom Minister Manoj Sinha asking him not to do slash IUC. On the other hand, other established telecom service providers have been strongly opposing any such decrease as it will hit their revenue which they receive from these interconnection charges.

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.

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An earlier report claimed, Reliance Jio, Reliance Communications, Aircel, MTNL demanded scrapping of the IUC regime and moving to the Bill and Keep (BAK) regime under which no operator raises such demand.

The move comes as a major win for Reliance Jio which wanted IUC to be slashed to zero.

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. Telecom operators levy IUC on incoming calls from other networks and the charges are passed on to subscribers.

"Lower termination charges are, therefore, likely to benefit consumers overall (both fixed and mobile) because operators will have greater retail pricing flexibility".