- 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.
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.