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Reliance Jio levy aimed at forcing IUC to be lowered, says Airtel

Financial Express 2019-10-09 20:52:52

Telecom operator Bharti Airtel on Wednesday alleged that Jio’s decision to levy 6 paise per minute on voice calls to rival phone networks is geared to “force IUC to be brought down”, and said ongoing review of call connect charges or IUC is consistent with TRAI’s previously-stated intent.

The comments by Sunil Mittal-led Bharti Airtel came after Jio blamed Telecom Regulatory Authority of India (TRAI) of regulatory flip-flop on the IUC issue while announcing a levy of 6 paise per minute on voice calls made to rival phone networks.



Jio has, however, also said it will compensate customers for the IUC charge by giving free data of equal value. Without naming Jio, Airtel in a statement said, “One of our competitors has imposed a rate of 6 paise for all off net calls made to other operators to cover the termination charge of IUC (Interconnect Usage Charge). They have gone on to suggest that TRAI has re-opened this issue”.

Airtel argued that the review was, in fact, in line with TRAI’s stated position on the matter in 2017 where it had made it clear that the issue will the revisited based on factors like adoption of new technologies (their impact on termination cost) and traffic patterns.

“Both these have not materialised. There are still over 400 million 2G customers from the poorest sections of society living in rural areas paying less than Rs 50 per month and who can still not afford to buy a 4G device. Second, there still is significant asymmetry of traffic,” Airtel said.

Airtel rued that even the current rate of 6 paise is significantly below the real cost of completing the call. “…on 19 September, 2017, when TRAI reduced the IUC from 14 paise to 6 paise and proposed a move towards Bill and Keep (zero IUC rate) with effect from Jan 1, 2020 they had specifically mentioned the following…The authority, if deems it necessary may re-visit the afore mentioned scheme of termination charge applicable on Wireless to Wireless calls after one year from the implementation of the regulation,” Airtel statement recalled.

Airtel further noted that the telecom industry is in a state of deep financial stress since the last three years with several operators having gone bankrupt and thousands of jobs having being lost. “The IUC is determined based on the cost per call. Given the massive 2G customer base in India the cost of the call at 6 paise is already significantly below the real cost of completing the call,” it added.

Airtel said: “Clearly, this off net charge being levied, therefore, is to force IUC to be brought down despite the heavy burden it puts in the receiving network. We are grateful that this very timely consultation paper to reassess IUC has been issued By TRAI,” Airtel said.