The entry of Reliance Jio in the telecom sector last year has impacted the profits of the existing players
Reliance Industries's chairman Mukesh Ambani, Aditya Birla Group's Kumar Mangalam Birla and Bharti Airtel's Sunil Mittal will address a mobile summit in the capital on Wednesday at a time when Reliance Jio, an Ambani firm and existing operators including Airtel, Vodafone have been arguing over the latest cut in interconnection usage charges (IUC).
The three-day event will also be attended by communications minister Manoj Sinha, law and IT minister Ravi Shankar Prasad, railways minister Piyush Goyal, among others. Telecom secretary Aruna Sundararajan and electronics and IT secretary Ajay Prakash Sawhney will also be part of the event apart from telecom CEOs.
The entry of Reliance Jio in the telecom sector last year has impacted the profits of the existing players. The tariffs have come down to a new low with voice calls virtually free. The incumbents have been asking for financial incentives from the government since the stress in the sector has increased manifold after the entry of Reliance Jio, according to them. The cumulative debt of the industry is around Rs 4.5 lakh crore.
The latest bone of contention between Reliance Jio and existing telcos is the cut in IUC to 6 paise per minute from 14 paise a minute to be applicable from October 1, announced by the telecom regulator Trai recently. The IUC will be brought down to zero from January 2020 as per Telecom Regulatory Authority of India.
While Reliance Jio was demanding a zero IUC, existing players wanted it to be doubled to 35 paise.
Operators plan to move court over Trai decision to cut IUC.
Interconnect usage charge is paid by the telecom operator on whose network call originates to the operator on whose network the call terminates. The reduction in IUC means fewer revenues for existing players and savings for the new entrant Reliance Jio.
COAI director general Rajan Mathews also said eight embassies, including those of the US, the UK, Finland and Germany, are participating in the event and close to 150 foreign delegates have confirmed their participation.
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