The Telecom Regulatory Authority of India (Trai) has cut down the call connect charges, aka Interconnect Usage Charge (IUC) by more than half to just 6 paise/min from October 1; and also that from 2020, the cost will be scrapped down to zero.
While incumbent mobile operators including Airtel and Vodafone are still struggling with financial blows received after introduction of Reliance Jio, Tria has cut down the IUC charges by 57% – making it 6 paise/min effective from October 1. Currently the prices are 14 paise per minute which will be cut half next month and Trai has also announced that the charges would be scrapped down to zero by 2020. This means there won’t be any payment for calls landing on other telcos’ networks. This rule will be seen as a relief to the latest entre – Reliance Jio.
Now we are not sure if this cut down will mean lowered call charges for customers, but as per estimates, this will save a chunk of Rs 3800 Crore for Jio, annually. Such a bonanza for Reliance Jio, but as they say it – one man’s enjoyment could be other’s misery; so the reduction is unlikely to benefit other telecom operators. Instead, it might hit the profitability and revenues of incumbent telecom operators like Airtel, Vodafone and others. Because, IUC is paid by the mobile operator on whose network the call originates to the network where it terminates.
That is extortion-ish for established telecom operators to whom, ever 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. The established operators such as Bharti Airtel and Vodafone have contended that telecom infrastructure in rural areas largely depends on revenue from incoming calls, and lowering or removal of such charge will hamper services.