In­cum­bents’ loss is Jio’s gain

Governance Now - - E-GOV NOTES -

The tele­com reg­u­la­tor has opted for the Bill and Keep (BAK) model for in­ter­con­nec­tion us­age charges (IUC) – which one op­er­a­tor pays to the other for call ter­mi­na­tion. By 2020, the tele­com reg­u­la­tory author­ity of In­dia (TRAI) will phase out do­mes­tic call ter­mi­na­tion charges on mo­bile to mo­bile calls. It has brought down the IUC to 6 paise from 14 paise per minute, from Oc­to­ber 1. At one stroke, the TRAI rul­ing on in­ter­con­nec­tion has fa­cil­i­tated sav­ings of ₹5,000 crore to Reliance Jio and loss of rev­enue for the in­cum­bents of ap­prox­i­mately ₹3,500 crore. The move, say tele­com ex­perts, would fur­ther lower the in­cum­bents’ ca­pac­ity to in­vest in the net­work. The in­cum­bents in­clud­ing Air­tel and Voda­fone-idea are al­ready bleed­ing with the ag­gres­sive of­fer­ings by Jio. The Cel­lu­lar Operators As­so­ci­a­tion of In­dia (COAI) has called the in­ter­con­nect reg­u­la­tion dis­as­trous and has de­cided to go to the court.

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