Will the 6 Paise IUC Be A Nightmare For Incumbents Telecom Operators?

Follow Us

The Telecom Regulatory Authority of India (TRAI) today slashed termination charge for all mobile to mobile calls to 6 paise per minute down from 14 paise per minute. The revised IUC charge will be effective from October 1, 2017, and will be ultimately reduced to zero from January 1, 2020.

mobile-india-people




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 Vodafone, Idea has to pay 6 paise per minute of IUC to Vodafone for the call. The IUC is levied on the calling subscriber by the caller’s telecom operator. A major part of the revenue for the telecom operators come from the IUC and the incumbent operators have a cumulative debt of Rs 8 lakh crore.

TRAI’s order is a positive for Reliance Jio Infocomm as it has been demanding a zero IUC earlier. The future is 4G as 4G networks have only one IP network for both voice and data, unlike 2G and 3G that have two distinct networks for voice and data. A 4G network transfers voice as a data packet which occupies smaller bandwidth. Reliance Jio is currently the only telecom operator whose entire network is built on the latest 4G VoLTE(Voice over Long-Term Evolution) technology.

There has been a gradual decrease in Interconnect Usage Charge since its inception. In 2003 the interconnect mobile termination charge was 50 paise per minute. In 2015, TRAI had slashed IUC to 14 paise per minute from 20 paise per minute before. Today TRAI has slashed the IUC to 6 paise per minute and it will be 0 from January 1, 2020 onwards.

A subscriber will gain if there is no IUC because of lower tariffs. On the flip side, telecom operators will bleed even more because of lower revenue. Lower revenue will result in lesser importance to R&D in the field of telephony and this will lead to inconvenience for the user.

Recent Comments

Rupesh :

Only 3500? These 5 states combined have 51744 towers. Means less than 5% per state. BSNL will never get level…

BSNL Installs 3,500 4G Towers Across 5 North Indian States:…

Faraz :

"BSNL plans to quickly upgrade 4G services to 5G by June 2024 " Is this a typo or a quote…

BSNL Installs 3,500 4G Towers Across 5 North Indian States:…

Faraz :

Population growth and growth of mobile users are more than that. And I was wondering Vi started gaining 4G customers…

Vodafone Idea Only Added 4 Million 4G Users in Four…

Girish Gowda :

Oh hell no. Airtel 4G is literally unusable aside from a few posh locations in the city. My mother has…

Spectrum Auction 2024: DoT Excludes 700 MHz Frequency Band, Get…

TheAndroidFreak :

They haven't deployed band 1 10Mhz at most of the places. Don't expect much of the speeds you mentioned. 3G…

Spectrum Auction 2024: DoT Excludes 700 MHz Frequency Band, Get…

Load More
Subscribe
Notify of
36 Comments
newest
oldest most voted
Inline Feedbacks
View all comments