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Mobile bills to get cheaper as Trai slashes call termination charges to Rs 6 paise per minute

IUC at 6 paise will lead to a gain of about Rs 4,000 crore annually to RJio

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Mobile bills to get cheaper as Trai slashes call termination charges to Rs 6 paise per minute
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The Telecom Regulatory Authority of India (Trai) on Tuesday more than halved interconnection usage charges (IUC) for mobile calls to 6 paise per minute from the current 14 paise.

The new charges will be implemented from October 1, the telecom regulator said in a statement.

From January 2020, IUC will be brought down to zero for all domestic calls.

For calls from wire-line to mobile, wire-line to wire-line and wire-line to mobile, the termination charges would continue to be zero, Trai said.

DNA Money had reported on August 15 that IUC is likely to come down to 5-8 paise per minute for calls in India.

According to sources, IUC at 6 paise will lead to a gain of about Rs 4,000 crore annually to Reliance Jio.

It would mean an estimated annual loss of Rs 1,500-2,000 crore for Airtel, Rs 1,500 crore for Vodafone and Rs 1,200 crore for Idea Cellular, they said. These figures could not be independently confirmed.

While the incumbent players had demanded an increase in IUC to 35 paise, Reliance Jio (RJio) wanted it to be scrapped and a shift to the bill-and-keep regime, under which operators only keep a record of incoming calls on their network but do not raise any demand from other operators.

It is learnt that the top operators may challenge the Trai regulation in the court.

IUC is the charge payable by a telecom service provider whose subscriber originates the call to the telecom service provider in whose network the call terminates.

The current IUC Regulation was notified on February 23, 2015, and came into effect on March 1, 2015.

Trai had issued a consultation paper for Review of Interconnection Usage charges in August last year.

IUC had become a bone of contention between the incumbent telecom players and RJio.

However, there won't be any impact in the mobile tariffs as the prices in India are already at their lowest level and voice calls are virtually free now after the entry of RJio.

For legacy players such as Bharti Airtel, Vodafone and Idea, a lower IUC would mean a dip in revenues at a time when they are already struggling in a highly-competitive telecom sector.

Sunil Mittal, chairman, Bharti Enterprises, and Vodafone CEO Vittorio Colao had written to authorities saying the current IUC at 14 paise was way below cost. In July this year, RJio had said India's top three telecom firms earned Rs 1 lakh crore in the past five years by not implementing a 2011 regulatory roadmap to cut IUC to zero.

FIRST IN DNA

  • IUC at 6 paise will lead to a gain of about Rs 4,000 crore annually to RJio
     
  • It would mean an estimated annual loss of Rs 1,500-2,000 crore for Airtel
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