How TRAI’s Recent Judgement on IUC And BAK Can Prove To Be A Game Changer for Subscribers and Telecom Operators?

TRAI recently held the meeting on Interconnect Usage Charges (IUC) with the telecom operators. IUC or interconnect usage charge is a fee that the caller’s operator needs to pay to the other operator if a mobile call terminates at the latter’s network. For example, if you are an Idea customer and make a call to a Vodafone subscriber, and Idea has to pay 14 paise per minute of IUC to Vodafone for the call.

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The meeting soon turned into a high voltage drama between the incumbent operators like Airtel, Vodafone and Idea Cellular on one side and Reliance Jio on the other.?? Bharti Airtel was pressing for increasing the IUC owing to the high debt in the telecom sector which currently stands at Rs. 4.6 lakh crore. IUC is currently fixed at 14 paise per minute as per the TRAI’s order of 2011. Reliance Jio was unhappy and demanded zero or a complete removal of the IUC and implement the Bill and Keep (BAK) regime.

Incumbent operators like Airtel, Vodafone and Idea want the IUC fee of 14 paise per minute to be increased as they claim the actual cost of terminating a call on their network is 35 paisa per minute. So it causes a loss 21 paisa per minute for a call originating from the other telecom operator.?? Airtel further said to the regulator that because there is a huge number of voice calls from Jio, Airtel is losing Rs. 550 crore every quarter due to IUC charges.

To counter the above allegation by Airtel, Jio alleged the incumbent operators have earned more than Rs 1.2 lakh crore on account of IUC as they have not yet implemented BAK.

“Operators have made a significant excess recovery over the actual cost of termination. The number one operator has made excess recovery of Rs 73,385 crore and the number 3 operator has made Rs 45,940 crore” Jio said.