Trai will scrap IUC from 1 Jan, 2021, instead of next month. Jio said a delay in scrapping IUC is unwarranted, anti-poor, and sabotages the govt’s Digital India mission
New Delhi: The telecom regulator on Tuesday deferred by a year a plan to scrap a levy charged by operators for handling incoming calls from rival networks, offering relief to older telcos that generate a part of their revenue from interconnect usage charges (IUC).
The Telecom Regulatory Authority of India (Trai) will now scrap IUC from 1 January 2021 instead of next month. As a result, operators will continue to earn 6 paise a minute for every mobile call they receive on their networks till 31 December, 2020.
The regulator has changed its stance about two years after it decided to scrap the levy from 1 January, 2020, a move that older telcos Vodafone Idea Ltd and Bharti Airtel Ltd claimed favoured newer entrant Reliance Jio Infocomm Ltd because its outgoing voice traffic was much higher than incoming. Scrapping IUC would benefit an operator with more outgoing traffic.
Telcos will continue earning 6 paise a minute for every mobile call they receive on their networks till 31 Dec, 2020
Trai cites ‘inadequate’ adoption of 4G for voice calls, asymmetries in inter-operator traffic as reasons to defer scrapping of IUC
Trai’s decision comes as a major relief for Bharti Airtel and Vodafone Idea, which have reported record losses in the quarter ended 30 September. Jio, which had 64% of its total traffic as outgoing as of June-end, favoured the levy being scrapped.
A zero IUC, or bill and keep, regime means operators would not make any money for receiving calls on their networks. If the traffic flow among operators is symmetrical, it will not have a negative impact on any operator as it is simply a charge paid by one operator to another.
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