Home World Economy IUC recommendations likely by month end, says telecom regulator RS Sharma

IUC recommendations likely by month end, says telecom regulator RS Sharma


NEW DELHI: Telecom regulator RS Sharma said recommendations on 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 than 1billion wireless subscribers at the end of May, according to Trai data.

If IUC is increases, Reliance Jio Infocomm, which started services in September, would need to pay more to the three telcos. Jio has backed scrapping the charge, while its three main rivals want it to be doubled to recover investments in setting up networks.

Trai cut 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 anyways 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. Vodafone India moved the Delhi High Court last month calling for greater transparency in Trai’s process regarding IUC. Telcos are already in court, having challenged Trai’s decision to cut IUC to 14 paise a minute.


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