Boost To Reliance Jio: Airtel, Vodafone Stand To Lose As TRAI Cuts IUC Charges

Mobile operators Vodafone and Airtel on Wednesday expressed disapproval over the revised Interconnect Usage Charge (IUC), issued by the Telecom Regulatory Authority of India (TRAI) and said that this decision would impact the industry grossly, especially now when it is under financial stress.

Without particularly mentioning Reliance Jio, Airtel said that the new interconnect charges have arrived in a non-transparent fashion, which would benefit only one operator.

“The suggested IUC rate, which has arrived in a completely non-transparent fashion, benefits only one operator, which enjoys a huge traffic asymmetry in its favour,” said the official spokesperson of the Airtel.

The Telecom Regulatory Authority of India (TRAI) earlier on Tuesday slashed the interconnect usage charge (IUC) from 14 paise per minute to six paise per minute, which will become effective from 1 October.

The termination charges will be completely scrapped from 1 January 2020.

The new charges are being seen as a relief for the latest entrant, Reliance Jio.

Airtel, in its statement on Wednesday, added that the sharp drop in the IUC rate will only help transfer a part of its cost to other operators, thereby, further worsening the financial health of the industry.

“As part of an industry, which continues to be a critical driving force behind the economic growth in the country, we are genuinely dismayed by this decision,” it added.

Vodafone, on its part, stated that they are considering their options in response to the TRAI’s decision and added that unless mitigated, the decision would have serious consequences for investments in rural coverage, undermining the Government's vision of ‘Digital India’.

"The Indian Telecom industry is already experiencing the greatest period of financial stress in its history. This is yet another retrograde regulatory measure that will significantly benefit the new entrant alone, while adversely affecting the rest of the industry as a whole,” said the official spokesperson of Vodafone.

"For mobile-to-mobile, the termination charge has been reduced from 14 paisa per minute to 6 paisa per minute w.e.f. October1, 2017. From January 1, 2020 onwards the termination charge for all types of domestic calls shall be zero," read the statement issued by the TRAI on Tuesday.

The termination charge or the IUC is a fee that a mobile service provider pays to another to link a call to the latter's network.

(ANI)