September 19: The Telecom Regulatory Authority of India (Trai) on Tuesday slashed the interconnect usage charge (IUC) from 14 paise minute to 6 paise per minute, which will become effective from October 1.
Losses to BhartiAirtel, Vodafone and Idea were estimated at over Rs 1,000 crore each.
A majority of the members of the Cellular Operators Association of India are "extremely disappointed" by the reduction and intend to move court "as it is clearly detrimental", said Rajan Mathews, director general. The new charges will be applicable from October 1, the regulator said in a notification.
Mathews said that no country in the world had a zero interconnect charge.
Mobile calls are now likely to cost less as the Telecom Regulatory Authority of India (TRAI) on Tuesday chose to cut interconnection usage charge (IUC) to 6 paise per minute from 14 paise earlier. "1st October 2017... From 1st January 2020 onwards the termination charge for all types of domestic calls shall be zero".
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. "And that is going to be a problem because the amount of revenues involved will be very large and the guys who are existing incumbents are not going to take it sitting down", he said.
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.
"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 cost it incurs through the retail tariffs, subject to competitive market conditions", it added.
This means if Airtel customer calls a Vodafone subscribers, then Airtel will have to pay termination charge to Vodafone.
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