Trai to come out with new IUC framework soon

Incumbents say removal or lowering of IUC would hit growth of telecom infrastructure in rural areas

The telecom regulator, which is looking to conclude the review of interconnect charges soon, is not likely to heed to the demands of incumbent operators to share with them the details of the methodology it had adopted for deciding the charges, which currently stands at 14 paisa per minute. 

The Telecom Regulatory Authority of India (Trai), which conducted an open house discussion on the issue on Thursday, will soon come out with the new framework on interconnect charges. The issue has been a bone of contention between incumbent players and newcomer Reliance Jio. The existing telcos want fully allocated cost based IUC, while Jio and Reliance Communications propose ‘bill and keep’ model, which means zero charges.

The Cellular Operators Association of India had written a letter to Trai seeking the cost model used for adopting IUC in earlier consultations and also the present one. “That question is not really relevant, as we are discussing a new framework for IUC,” Trai chairman R S Sharma said.

On the demand of further deliberation, Sharma said that was “not required now because we have had extensive consultations on the issue”.

The regulator will give the operators one week to submit their comments before finalising its stand on the issue. 

The old operators said the current 14 paisa charges are below cost as they incur between 30-35 paisa per minute on calls and the IUC must be doubled. However, Jio has said the cost of incumbents is high because of their network inefficiency.

The open house saw participation from all the telecom operators barring Telenor. 

The incumbents said removal or lowering of IUC would hamper growth of telecom infrastructure in rural areas, as this largely depends on revenue from incoming calls. Jio rebutted this and said it would provide 99 per cent coverage by the end of this year even if IUC was dropped.

"Poor people in the country are subsidising the inefficient network of telecom operators. There is much less cost in carrying calls on a 4G network but incumbent operators are making people in rural areas use 2G networks,” a Jio official said. 

A Bharti Airtel representative replied, "IUC in rural areas is not for subsidy but to recover charges because terminating operators (on whose platform a call is made) cannot charge for incoming calls.” IUC, the representative said, was a way of recovering cost. Airtel maintained that its 4G roll-out was at par with that of Jio.

Vodafone said Trai's report had noted much more of incoming calls were made in rural areas compared to outgoing ones and IUC provided revenue to support telecom infrastructure at such locations.