TRAI announces drop in Interconnection Usage Charge (IUC)

TRAI to slash call connect charge to 6 paise  minute from October 1

The regulator added that these charges would be completely done away with January 1, 2020 onwards. A telecom operator presently charges 14 paise per minute for every incoming mobile call, called mobile termination charge (MTC), received from the other network.

The telecom regulator also said that no call termination charge will be applicable from January 1, 2020. Charges levied for interconnecting mobile calls are at the centre of the IUC issue. The move was said to be implemented after the latest telecom operator, Reliance Jio had requested for the charges to be reduced and eventually scrapped in order to provide better and cheaper call rates to the customers.

"Vodafone is already in court after Trai had reduced IUC to 14 paise a minute from 20 paise in 2015".

The IUC charges had been the focus of bitter exchanges between new entrant Reliance Jio and incumbent operators such as Airtel.

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Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), the industry lobby that represents the interests of the mobile phone industry, termed the move disastrous and said it would invite legal action. ".if you reduce the termination charge, the principal beneficiary is Jio because they are the ones dumping traffic onto other networks".

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". "The reduction in the mobile termination charge is likely to yield consumer benefits", Trai said in its new regulation even as older operators such as Bharti Airtel, Vodafone and Idea Cellular strongly oppose the move, rather fighting for a hike in IUC rates.

The Trai's decision came via a gazette notification issued more than a year after it started the consultation process on the contentious issue, which saw a war of words between telecom companies.

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