Airtel, Vodafone, Idea will be biggest losers of lower IUC rates: report

Airtel, Vodafone, Idea will be biggest losers of lower IUC rates: report
Three big palyers allege that there is a substantial dip in their revenues due aggressive pricing by Jio.

Mumbai: Incumbent telecom operators Bharti Airtel, Idea Cellular and Vodafone will be biggest losers if Telecom Regulatory Authority of India decides to cut Interconnect Usage Charges for telecom companies. IUC is a fee that a destination network charges to a source network for connecting the call.

At present, telecom companies charge 14 paise, fixed by TRAI, for receiving or connecting incoming calls on their networks from the source company or whose network is used by customers to make a call. IUC is also called as call termination charge.

Read more   ↓

According to a report on DNA that cited people privy to the development, TRAI is giving final touches to the proposal that aims to halve IUC charge from present 14 paise to 5-8 paise. It is expected the regulator will unveil the outcome later this month.

“We have studied various submissions. Many MPs (Member of Parliament) have also advocated a zero IUC. With the change in times due to technological advancement, IUC needs to come down,” the DNA report quoted a source as saying.

The telecom industry has witnessed three big players logged in a battle of survival with new entrant Reliance Jio that by offering dirt cheap services has ‘disrupted’ the sector. Due to arrival of Jio that allows free voice calling for lifetime, the number of calls made to these three networks has come down substantially, according to reports.

The three already existing telecom companies fear there revenues will further dwindle if TRAI decides to either slash IUC to 5-8 paise or scrap it altogether. Reliance Jio, however, has denied all the allegations levelled by the three incumbent players. Jio in its counter attack blames a business model of these companies for revenue losses.

Earlier, Vodafone, India’s second largest telecom operator had claimed that the actual call termination charge was 35 paise and not 14 paise which is at present being charged by telecom companies. Jio had demanded that TRAI should scrap the IUC altogether.

Last time, TRAI revised these rates was in March 2015 when the regulator brought down the call termination charge from 20 paise to 14 paise. Lower IUC rate is likely to benefit Reliance Jio as it offers a free voice calling service that enables users to make more number of outgoing calls.

Source by deccanchronicle..