Trai May Fi­nalise IUC Re­port by Month-end

Reg­u­la­tor is cur­rently hold­ing con­sul­ta­tions on re­vis­ing or scrap­ping the charge

The Economic Times - - Companies - Gul­veen.Au­lakh@ times­group.com

New Delhi: Tele­com reg­u­la­tor RS Sharma said rec­om­men­da­tions on the con­tentious in­ter­con­nect us­age charge should be fi­nalised by Au­gust end, with sources stat­ing the cal­cu­la­tion of costs for ar­riv­ing at the fee is still on.

“We will bring out the find­ings by the month-end,” Sharma said. The IUC, a charge paid by the op­er­a­tor of a net­work from where a call orig­i­nates to the telco where it ter­mi­nates, is cur­rently 14 paise a minute. The Tele­com Reg­u­la­tory Author­ity of In­dia is hold­ing con­sul­ta­tions on re­vis­ing or scrap­ping the charge, in keep­ing with the evo­lu­tion of net­work tech­nol­ogy.

“There can­not be any di­rec­tion (on the rate) yet un­less all cal­cu­la­tions of IUC cost­ing are done, which is not yet com­plete,” a Trai of­fi­cial said, ask­ing not to be iden­ti­fied.

Bharti Air­tel, Voda­fone In­dia and Idea Cel­lu­lar stand to lose the most if IUC is scrapped as they are the big­gest three by sub­scribers and gar­ner a ma­jor share of the ter­mi­na­tion charge as most calls end on their net­works.

The three op­er­a­tors to­gether had a 58% share of the coun­try’s more than1 bil­lion wire­less sub­scribers at the end of May, ac­cord­ing to Trai data.

If IUC is in­creased, Re­liance Jio In­fo­comm, which started ser­vices in Septem­ber, would need to pay more to the three tel­cos. Jio has backed scrap­ping

Fix­ing a Fee

the charge, while its three main ri­vals want it to be dou­bled to re­cover their in­vest­ments in set­ting up net­works.

Trai cut the IUC to 14 paise per minute from 20 paise per minute in 2015. In its con­sul­ta­tion pa­per on the sub­ject is­sued on Au­gust 5, 2016, Trai said the in­dus­try may need to ef­fec­tively scrap IUC due to evolv­ing net­work tech­nolo­gies, since IP-based net­works are poised to be net­works of the fu­ture for pro­vid­ing tele­com ser­vices.

“In IP-based net­works, tra­di­tion­ally, there has been no cus­tom of levy­ing ter­mi­na­tion charges for the traf­fic ar­riv­ing in a par­tic­u­lar net­work,” the reg­u­la­tor had said.

Experts said any IUC re­vi­sion would not di­rectly lead to a change in con­sumer bills, which is mainly a func­tion of de­mand and sup­ply. “Any change in in­put cost alone may not lead to change in con­sumer bills, which are pri­mar­ily driven by mar­ket forces which is de­mand and sup­ply. Tar­iffs in In­dia are any­way, among the low­est in the world,” said Prashant Sing­hal, global tele­com lead at EY.

A se­nior ex­ec­u­tive at a mo­bile phone op­er­a­tor said that a change ei­ther way won’t make any dif­fer­ence to the con­sumer. “Calls are any­ways al­most free. Where do you go from here? And there is no ques­tion of rais­ing the rates given the com­pe­ti­tion. So, con­sumer bill move­ment will be a func­tion of com­pe­ti­tion, not IUC,” said the ex­ec­u­tive.

The top three tel­cos have pre­vi­ously ac­cused the reg­u­la­tor of not be­ing trans­par­ent about IUC cost mod­els.

IUC is charge paid by the op­er­a­tor of a net­work from where a call orig­i­nates to a telco where it ter­mi­nates

New en­trant Re­liance Jio has backed scrap­ping the charge

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