Telcos to seek fresh dialogue over interconnect usage charges

NEWDELHI: The Cellular Operators Association of India (COAI) will approach the telecom regulator to seek fresh consultations on scrapping interconnect usage charge (IUC), a top official at the telecom lobby said.

IUC is levied by mobile networks handling incoming calls from rival networks, and is a major source of revenue for telcos. In September 2017, the Telecom Regulatory Authority of India (Trai) ordered a reduction in IUC to 6 paise per minute from October 1, 2017 from 14 paise earlier, and an end to IUC from January 1, 2020, to bring down tariffs.

Telecom operators, already reeling from a fierce price war that started with the entry of Reliance Jio Infocomm Ltd in September 2016, were hit hard by the order.

The telco lobby would seek an opportunity to discuss with the regulator whether the move would achieve the intended objective, given that tariffs are already very low.

“Looking at that order, we are saying that have there been material changes that would need to have this revisited...You want to look at the objectives you were trying to achieve, has it begun to achieve the objectives for which you believed it was necessary to reduce the interconnect charge,” COAI director general Rajan Mathews said in an interview.

Zero IUC means operators such as Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India make no money for receiving calls on their networks.

If the traffic flow among operators is symmetrical, it will not have a negative impact on any operator as it is simply a charge paid from one operator to another.

The decision to cut IUC was during the first term of Trai chairman RS Sharma.

Last week, he was granted a second term after the Appointments Committee of the Cabinet on August 9 approved his reappointment till September 30, 2020.