TRAI Slashes Call Connect Charge to 6 Paise Per Minute

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This means if Airtel customer calls a Vodafone subscribers, then Airtel will have to pay termination charge to Vodafone.

New entrant Reliance Jio said that cost of delivering calls on new technologies is nearly negligible and incumbents continue to gain from IUC even after having recovered cost of their entire network.

The telecom regulator on Tuesday slashed termination charge on mobile voice calls to 6 paise a minute, from the current 14 paise per minute which would reduce cost of such calls. The older telecom players wanted it raised to at least 30 paise per minute.

Late Tuesday, the Telecom Regulatory Authority of India lowered the interconnect usage charge, paid by the mobile operator originating a call to the network where it is received, to 6 paise a minute effective October 1 and made a decision to scrap the charge from January 1, 2020. TRAI stated that the increased usage among the masses will help the telecom companies recover the losses incurred by reducing IUC charges. The Trai said, "Lower termination charges are therefore likely to benefit consumers overall (both fixed and mobile) because operators will have greater retail pricing flexibility".

Telecom operators to seek legal help against TRAI's IUC slashing

An earlier report claimed, Reliance Jio, Reliance Communications, Aircel, MTNL demanded scrapping of the IUC regime and moving to the Bill and Keep (BAK) regime under which no operator raises such demand. The latest move by TRAI is set to benefit Jio the most, however, it has come as a setback to the existing telecom operators including Airtel, Idea and Vodafone.

"Whatever the Trai does, another court battle is on the cards".

Established telecom operators have argued that every call on the network has a cost, and expenses of an incoming call on their network should be borne by the operator from whose network, the call has originated.

The telecom regulator had reduced the interconnect charges in 2015 to just 14 paise a call, much to the chagrin of state-run entities BSNL and MTNL as it reduced their revenues drastically.

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