- The IUC is currently set at 6 paise per minute
- Trai might defer the shift to zero IUC regime by two years
- Trai has held an open-house discussion in the last week
The telecom industry has been caught in a bit of tussle right now, and as is the case with any business, the effects of the industry are making their way to the consumers as well. Here, we are talking about some of the reeling changes that the telecom industry is seeing in the latest turn of events. The first of them happens to be the tariff hike which will begin in a few days from now. However, the hype about the tariff hike in the industry has slightly distracted the subscribers from another changed which was brought forth by the Mukesh Ambani led telecom operator, Reliance Jio. The move of introducing IUC talk time vouchers and the charges of 6 paise per minute was met with a lot of criticism and a lot of memes as well. As it’s obvious, the subscribers did not like this veiled price hike. But, now the question looms in the head of the consumers, how long will they have to keep up with paying the 6 paise per minute charge. To know that, we will have to roll back a little.
IUC Cost Has Actually Come Down Behind the Scene
What the subscribers might be shocked to know is that while they are being started to charge 6 paise per minute from the biggest telecom operator in India, over the years, the IUC cost has actually come down. Firstly, it is crucial to note that the Interconnect Usage Charges (IUC) is something that the telecom operator has to pay to another operator for carrying its calls. For example, if a subscriber were to call from Jio to Vodafone, then Reliance Jio will have to pay the set IUC cost to Vodafone for carrying the call which originated from Jio. Previously this cost was set at 14 paise per minute, but two years back, Trai brought down the cost to 6 paise per minute.
The issue here is that the 6 paise per minute cost was decided to go down further to zero by the end of 2019, which does not seem to be happening and there are a couple of reasons for this. Firstly, the IUC cost is something that the 2G operators have to pay heavily, and secondly, the financial situation of the industry is such that the 6 paise per minute cost cannot be done away with right now.
Reliance Jio Subscribers to Take the Fall
The Telecom Regulatory Authority of India (Trai) is conducting Open House discussions, and it has floated a consultation paper in this regard to ask the views of industry stakeholders about what should be the pathway for the IUC charges. However, if the plan of staying with the 6 paise per minute charges for two more years is opted, then the incumbent telecom operators like Vodafone Idea and Bharti Airtel might support the move as they are the ones receiving the nett payout from the IUC which Reliance Jio gives them. Since Reliance Jio is the biggest telco in the country and has most subscribers, it also boasts of having the most outgoing calls to other operators thus resulting in a massive payout to other telcos which is more than what they pay in return.
Now because of this high cost, Reliance Jio has decided to charge this cost from the subscribers, whereas the other telcos do not feel the need to do so. This could mean that the subscribers might have to continue paying 6 paise per minute to Reliance Jio, which in turn Reliance Jio would pay to other telcos. The subscribers of other operators, however, will be free from this transaction.
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.