Trai Decision to Scrap IUC in 2020 is a Positive Sign, But the 6 Paise IUC to Further Create Imbalance in Telecom Industry: CMR India

Trai’s latest directive to bring down the Interconnect Usage Charges from existing 14 paise to 6 paise is yet another stressful thing to happen to the already reeling telecom sector in India. For certain, the operators won’t be able to pass on the benefit to the consumers and one should not expect the call charges to go further down says CMR India.

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The regulator’s decision to scrap IUC in 2020 is a positive sign that should motivate operators further to align investments towards all IP next-generation networks aligning with the global trends and also exhibits Trai’s proactiveness in setting up a regulatory regime for future technologies.

However, the reduction of IUC is going to hit the investments and ROI on the existing infrastructure investments of operators adversely at a time when the revenues are colliding because of the disruptions in the market from techno-commercial perspectives says Faisal Kawoosa, Principal Analyst Telecommunications & ESDM at CMR India.

Operators in India still have revenues from voice amounting to 52% of the cumulative earnings and there is still asymmetry in the patterns of incoming and outgoing traffic over the operator networks. This can be observed having a look at the statistics of the No. 1 operator in the country, Airtel.

Below, the graph shows the pattern for the month of January 2017.

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In the above graph, Airtel has shown the asymmetry in the traffic for the month of January 2017, with other operators. Though it hasn’t identified them; however, it can be easily understood that the first dataset refers to Jio where 93% is incoming and mere 7% is going out from Airtel to its network, he further added.