IUC has nothing to do with tariffs, says Airtel CEO
NEW DELHI: Interconnect usage charge (IUC) is not related to the tariff charged by telecom operators from users and is simply a bilateral arrangement between operators, Bharti Airtel chief executive Gopal Vittal said on Tuesday.
“IUC has nothing to do with tariff. It’s a clearing house for the cost of carrying the call. It’s a bilateral thing between carriers,” Vittal said on the sidelines of a session at the India Mobile Congress on Tuesday.
Vittal’s statement comes a week after a fresh war of words erupted between Airtel and Reliance Jio after the latter, India’s only profitable telecom operator, said it will start charging for calls made to rival networks at 6 paise a minute, reneging on a promise to keep voice calls free for its customers.
Jio said it “had been compelled most reluctantly and unavoidably” to do this following the decision of the Telecom Regulatory Authority of India (Trai) to review the date for scrapping interconnect usage charge from 1 January 2020, which has led to regulatory uncertainty.
“Over the last 20 years, the IUC has always been absorbed in the cost of doing business and the tariff is what it is,” Vittal said.
Jio’s move came three weeks after Trai on September 18 floated a fresh consultation paper to see if there is a need to revise the applicable date for scrapping IUC, given the continuing imbalance in inter-operator traffic.
“As far as IUC is concerned, there is a consultation paper that Trai has released. We await the outcome of that,” Vittal said.
Meanwhile, a top Jio official said on Tuesday that Trai’s move to re-examine the decision of scrapping IUC from January 1, 2020 is a regressive step and will further the digital divide in the country.
“Starting a fresh consultation process just 3 months before the date to implement the decision (to scrap IUC) is an incentivisation programme to continue to keep 400 million customers on 2G networks without digital connectivity,” Jio’s president-networks, Mathew Oommen said in an interview.
“This is not a progressive technology adoption process,” Oommen said, adding that the concept of point of interconnect and interconnect usage charge is related to 2G technology and hence obsolete. “If IUC is not scrapped, it is unfair to the carrier and to the customers...There are 400 million people that are still on 2G networks and hence digitally unconnected...the guys (telcos) in the 2G world are thinking about IUC,” he said, adding that the industry will become obsolete if operators don’t invest in their 4G networks.
“Why are incumbent operators managing several networks,” Oommen said.
IUC, at 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks.