TRAI revises IUC (Interconnect charges) to 6 paise/minute, effective Oct 1

Posted September 20, 2017

The move was said to be implemented after the latest telecom operator, Reliance Jio had requested for the charges to be reduced and eventually scrapped in order to provide better and cheaper call rates to the customers.

This come as a big blow to both Airtel, Vodafone and Idea cellular.

Mobile calls are now likely to cost less as the Telecom Regulatory Authority of India (TRAI) on Tuesday chose to cut interconnection usage charge (IUC) to 6 paise per minute from 14 paise earlier.

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IUC stands for interconnect charge and it is the fee which is paid by the telecom operator of the number from which a call is made and it is paid to the network operator which receives the call.

The Telecom Regulatory Authority of India further said it will phase out mobile termination charges by January 1, 2020. The Interconnect Usage Charges (IUC) has been one contended issue, recently questioned by Reliance Jio, which termed IUC as an "artificial barrier". Established companies including Airtel, Idea and Vodafone wanted the IUC to be increased to help recover their investments in acquiring spectrum and building networks. The IUC will be 6 paise per minute from October 1.

Reliance Jio had said in a presentation to Trai recently that telecom operators gained to the tune of Rs 1 lakh crore from IUC.

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According to PTI, TRAI on Tuesday said, "On the basis of comments received from stakeholders, in writing or during the open house discussion or during the workshop, the Authority has prescribed revised domestic mobile termination charges through these regulations".

The older telecom players are expected to move court to challenge Trai's decision as it threatens to suck out a massive chunk of their revenues.

TOI was the first to report on the impending cut in IUC charges in its edition dated August 13. The reduction in interconnect usage charge will benefit Jio, for which the charge was a huge liability. Charges levied for interconnecting mobile calls are at the centre of the IUC issue.

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