Reliance Jio prevails over Airtel, Idea as Trai cuts IUC

Telecom operators to seek legal help against TRAI's IUC slashing

Effective October 1st, TRAI has reduced IUC charges to 6 paise/minute from the existing 14 paise/minute.

Meanwhile, any other type of call - between landline to landline, or landline to mobile phones - will continue to be exempted from all termination charges. Off late, this charge has been one of the biggest factors behind the earnings of telecom operators and since the launch of Reliance Jio, this was being highly debated because Jio provides all calls for free. "Even if IUC was lowered by half a paise, it would have gone to court", said a senior industry executive.

Domestic termination charges is the amount paid by the telecom operator whose user begins the call.

TRAI announcing the new call termination charge said it will be applicable from October 1, 2017, and from January 1, 2020, it will be completely eliminated. TRAI stated that the increased usage among the masses will help the telecom companies recover the losses incurred by reducing IUC charges.


Industry analysts said the Trai move was negative for BhartiAirtel, Vodafone India and Idea Cellular, modestly positive for Anil Ambani-owned Reliance Communications and Aircel and beneficial for Reliance Jio. The companies have, however, been countered equally aggressively by Mukesh Ambani's Reliance Jio, a company that heralded the new dirt-cheap tariff regime September previous year when it launched its services with life-time free voice calling and very-low data tariffs.

"Whilst mobile operators may seek to recover lost IUC revenues through higher retail charges to customers, in Indias intensely competitive market it is unlikely that they will be able to do so", Koong said.

TOI was the first to report on the impending cut in IUC charges in its edition dated August 13. Charges levied for interconnecting mobile calls are at the centre of the IUC issue. The reduction in interconnect usage charge will benefit Jio, for which the charge was a huge liability.

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