Telecom body alleges misinformation on IUC

The Cellular Operators Association of India (COAI) has said entities seeking implementation of the ‘bill and keep’ (BAK) method for interconnections between operator systems are “distorting facts”.

They’ve cited an affidavit given by the Telecom Regulatory Authority of India (Trai) to the Supreme Court (SC) in 2011. That affidavit, it has said, listed symmetry of traffic as a pre-condition to implement a BAK regime. The Mukesh Ambani-owned Reliance Jio had alleged the top three operators had benefited by at least Rs 1 lakh crore due to non-implementation of BAK.

During an open house discussion on the interconnection usage charge (IUC) on July 20, many participants had claimed that in 2011, Trai had said it would implement the BAK regime in two years from 2011. IUC is a regulation made by Trai in which phone companies pay one another for using each other’s network to complete calls.

“Treating this affidavit that has been filed in an ongoing litigation as equivalent to a regulation, these participants have been demanding implementation of BAK,” COAI said in a letter to Trai. 

The regulator, it said, had notified IUC regulations in March 2009, fixing the mobile termination charge (MTC) at 20p a minute. The regulations were challenged by telecom companies at the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). The latter in September 2010 asked Trai to reconsider the matter afresh and to complete the consultation process in a time-bound manner, so that new IUC charges could be implemented by January 1, 2011. 

However, Trai filed an appeal in the SC against the TDSAT order in September 2010. The SC in July 2011 directed Trai to calculate and resubmit the MTC, with and without inclusion of capex/capital cost. Subsequently, the COAI letter said, Trai gave an affidavit in October 2011, with calculations on MTC using different methodologies.

Later, Trai sought the SC’s permission to notify the regulations with the rates contained in the affidavit. However, the SC dismissed the application and the said petition was still pending with the SC, said COAI. Their letter says Trai initiated a consultation in 2014 to review IUC and in February 2015, the MTC was fixed at 14p per minute. “During formation of IUC regulations in 2015, Trai deliberated on feasibility of implementation of the BAK regime at length and consequently rejected the implementation due to the reason that the level of imbalance/asymmetry did not fulfill the basic requirement of symmetry before adopting a BAK regime,” it said.

Trai is reportedly aiming to conclude the IUC review soon and will come out with a new framework. The issue has been a bone of contention between incumbents and newcomer Jio. The existing telcos want fully allocated cost-based IUC; Jio and Reliance Communications (a separate group) propose the BAK model, which means zero charges.