Bharti Airtel Seeks Postponement of Zero IUC Regime By Another 3 Years from Trai

Bharti Airtel and Reliance Jio are divided on the issue of Interconnect Usage Charges, and the divide between the telcos persists even as Trai is deciding on deferment of zero-IUC regime

Highlights
  • Reliance Jio wants to shift to a zero-IUC regime
  • Currently, Reliance Jio has a net payout of IUC to other telcos
  • Bharti Airtel and Vodafone Idea are the net gainers
  • Bharti Airtel says that network symmetry has not yet been achieved in the industry

Sunil Bharti Mittal led telecom operator, Bharti Airtel has asked the Telecom Regulatory Authority of India (Trai) to postpone its plans of migrating to the Zero-IUC regime by a total of three years. It is worth noting that currently, the telecom regulator is ideating on whether or not it should postpone the transition to a zero-IUC regime by two years. However, as per an ET Telecom report, Bharti Airtel wants to further this timeline by a year. The telco has raised this demand on the grounds that network symmetry has not yet been achieved the industry and more than 400 million users continue to use the 2G network, as per the regulator. According to the previous plan of the telecom regulator, the industry was to make a shift to a zero-IUC regime by January 2020 from the existing IUC price of 6 paise per minute. This would have meant that the operators would not have to pay anything in the name of IUC.

Bharti Airtel Urges Trai to Delay Shift to Zero IUC

The telecom regulator had also sought submissions, comments and counter comments on its consultation paper over the Interconnect Usage Charges (IUC) and whether or not it should defer these charges by a few years. To this, Bharti Airtel had replied that “The (London-based) GSMA too has predicted that 12-13% of customers will continue to use 2G handsets till 2025.” Bharti Airtel also added that that the traffic from the 4G only operator continues to be on the higher side in terms of both magnitude and percentage, thus implying that the industry has not yet achieved traffic symmetry. While Bharti Airtel stands with the idea of deferring the shift to a zero-IUC regime, the Mukesh Ambani led telco and the Airtel rival, Reliance Jio, does not support the same idea.

In its own submissions to Trai, Reliance Jio has noted that the proposal was created by Trai for Bharti Airtel and Vodafone Idea to ramp up their speed of switching to the 4G network and to give them incentives to do that. Adding on top of this, Reliance Jio has said that Vodafone Idea and Bharti Airtel are now yet to switch completely to a 4G network and a deferment of the plan in any way would mean that the Trai and government’s credibility would take a hit. Not only this, but Reliance Jio also added that such a move would make the investors wary and would discourage investment from other countries and from within the country as well.

Reliance Jio Holds a Different Stance

It is worth noting that IUC is paid by every operator in the industry right now for carrying calls on their network. For example, if a Reliance Jio customer calls another customer on the Bharti Airtel network, then the IUC is payable by Reliance Jio. Now, since a lot of calls go from Reliance Jio’s network to other networks, the net payer of IUC in the industry is currently Reliance Jio, wheres Bharti Airtel and Vodafone Idea enjoy a payout every month. Hence, the incumbent telecom operators are against the move to a zero-IUC regime as of this moment.

Trai’s Calculation on IUC Goes Wrong

There is also the story behind IUC charges which has been going on the industry since the past two years. Back in 2017, Trai slashed the IUC by a whopping 56% from the previous cost of 14 paise per minute, down to 6 paise per minute. The regulator was of the mindset that this would encourage the telcos to move to a 4G network. It also considered that a lot of calls would flow on VoLTE or packet-switching technologies, thus eliminating the need to charge an IUC eventually.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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SaieshKiran Fernandes | GoaKunalAniruddha Dhar|Santragachi|West BengalNikhil Recent comment authors
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Girish Gowda | BengaLuru
Girish Gowda | BengaLuru

Airtel gonna loot more. Get ready.

DJ Bobby
DJ Bobby

Shameless airtel

dragonmonk
dragonmonk

@DJ What’s the shame in it? You aren’t paying from your pocket, are you? Operators have to recoup costs for the investment they have made and then some – to not go bankrupt. This is a business-business transaction and has been all along, except err… Jio, which is trying to pass on these expenses to their customers.

Nikhil
Nikhil

113000 Crores debt on Airtel. 120000 Crores debt on Vodafone-Idea. More than 200000 Crores debt on Jio. 15000 Crores of Debt on BSNL-MTNL.

Kunal
Kunal

My friend – when you divert funds from 2g profits to expand in foreign countries . Your debt Will increase. Airtel has expanded to sri lanka , Bangladesh , Myanmar & number of African countries. No complaints , it is their money & business. They are here to diversify & make maximum money. But fact of the matter is , avoid has not spent in time with in India to be with technology. So crying for huge debt is baseless. There was a time , when Airtel Africa units losses were subsidise by India profits. So definitely , your spending… Read more »

Aniruddha Dhar|Santragachi|West Bengal
Aniruddha Dhar|Santragachi|West Bengal

Yes, totally agree with you. These things I was telling to @nikhil the other day on “airtel CEO crying for tariffs increase” post.

Nikhil
Nikhil

I agree with everything. But when you say all this, you don’t say anything about free+rock bottom tariffs of Jio. Also you are saying this as if Airtel haven’t expanded at all in 4G(quiet fast from 2016 to 2018 than I ever expected. You won’t go to 2G unless and until you call Jio number from Airtel. If your all numbers on Airtel then you will get decent if not the best of HD calling experience). They were best performers in 2018 and they are still better performers than rest in 2019(even though this is limited to city limits) in… Read more »

Kunal
Kunal

I have no complaints against Airtel. They are good & consistent. I am a happy customer of Airtel. But I don’t agree with their debt claim. They do lack transparency & have been very greedy . For Jio – from day one Jio has claimed that they are a data network . They have provided calls for free as they charge per GB. For the present situation – Jio has claimed that they will charge 6 paise per minute as they are paying to other network for call. Jio wants iuc to be free. They are saying If iuc is… Read more »

Aniruddha Dhar|Santragachi|West Bengal
Aniruddha Dhar|Santragachi|West Bengal

Well articulated. Absolutely agree on this.

Kiran Fernandes | Goa
Kiran Fernandes | Goa

Spot on Kunal, AVoId will rush to close down 2g after iuc is scrapped and will complete it in a year. If not, they’ll close down 2g in 2030. Brainless monks can’t understand this.

Kunal
Kunal

Jio debt is reduced to 154000 crores as tower & fiber has been separated into two separate units from Jio.

Jio has entered into a long term agreement for paying them rent for usage .

Both units are being sold to institutional investors looking for fixed returns over long term.

Even with high debt & interest costs , Jio is making reasonable profit.

Their investment cycle is almost complete & now on from next quarter , Jio is looking to reduce debt as they are having good cash flows.

Nikhil
Nikhil

154000 is still more than the rest. If you think investment cycle is complete then you are wrong. They need to invest a lot on fiber before getting 5G in India. Trust me, 5G will be even worse than 4G of Jio. And mostly limited to cities. Speeds are not even reaching 10Mbps in peak times. Only 25-30% of tower are connected to fiber. The data you mentioned on fiber front of Jio is very less from 5G perspective. Jio needs to invest money for two more years. Snapdragon 735 is about to launch. From what I have experienced from… Read more »

Kunal
Kunal

Jio is far ahead of competition in tower count & fiber roll out. Network quality is not good due to over load . They have very less spectrum as compared to their load. Three years back – During last spectrum auction, – even Jio did not imagine that they will garner such a huge base in a short time. Jio is badly waiting for spectrum auction. They will add good amount of it , to increase capacity . Network experience will improve after that & will be consistent. Jio suffers from congestion only. Their signal quality & indoor coverage is… Read more »

Saiesh
Saiesh

I m not concern about debt on company. I always supported jio being Indian company, I had ported my primary number from idea to jio. And still was with jio inspite of bad network no speed (literally 512 kbps is said to be gud speed) still I supported jio. The day jio started unethical business of reducing out going call duration to 20 sec from its network to other network. I raised complaint but customer care said it was fault with network which I was calling n m like what d he’ll. Jio did it for their unethical gains n… Read more »

Mdr
Mdr

Even Idea is unethical it took Rs 995 from customers giving just Rs 25 Talktime promising LifeLong incoming Free and have now broken the promise my scrapping Lifetime Validity and making those LifeLong Validity users pay every month for service validity for receiving incoming calls..

Saiesh
Saiesh

Yes agreed with you.
The trend to keep your number active part per month was started by jio. Not avoid no one speaks about it.
What everyone talks about is avoid is not gud

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