Airtel, Voda, Idea to move court on IUC cut

Telecom operators to seek legal help against TRAI's IUC slashing

"It was a disastrous move. most of the members had indicated that they would probably move court for redressal in the matter because this type of hit to the financial statements of major operators is clearly not something that they can sustain and that has been made very clear to the regulator", COAI Director General Rajan Mathews said.

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

In a letter to Trai chief R.S. Sharma last month, Idea chairman Kumar Mangalam Birla said the call termination cost of a typical Indian cellular firm worked out to 30-35 paise a minute.

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.

Effective October 1st, TRAI has reduced IUC charges to 6 paise/minute from the existing 14 paise/minute.




"Interconnect charges (are) important in the current scenario, where traffic asymmetries have increased to unprecedented level of 10:1 as the new operator (Reliance Jio) offers free voice service", Birla wrote.

The Telecom Regulatory Authority of India (Trai) said, "Mobile call connection charge cut to 6 paise per minute from 14 paise now, effective October 1".

Jio, on the other hand, wanted IUC to be waived, saying it will benefit consumers. The IUC will be 6 paise per minute from October 1. The reduction in interconnect usage charge will benefit Jio, for which the charge was a huge liability. The genesis of interconnect usage charge goes back to January 2003, when the calling-party-pays rule was introduced in India.

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.

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