This price differential, which is higher than the IUC rate, is clearly a way for incumbent operators to subsidise on-net calls, and is anti-competitive. The older telcos also wanted it to be 30 paise. "When mobile operators decide on investment levels, they reasonably anticipate IUC for terminating traffic on their network", Koong pointed out.
Reliance Jio had said in a presentation to Trai recently that telecom operators gained to the tune of Rs 1 lakh crore from IUC. At the same time, Vodafone and Idea and other telecom operators will find themselves stuck between a rock and a very hard place.
As of now, IUC was billed as 14 paisa per minute.
"Majority of the members will seek court relief given the magnitude of the financial loss", said Rajan Mathews, head of lobby group Cellular Operators' Association of India.
Bhatia said that it has now become clear that what is the quantum of the cut in the IUC, and by when will it take place. This will cripple our data-driven telecom revolution, unless the government scraps most legacy fees, auctions spectrum at reasonable rates, and scraps revenue sharing, spectrum-use fees and IUC altogether. The IUC will be 6 paise per minute from October 1. Trai has also announced that it is planning to abolish the IUC charges on all local calls from January 1, 2020. The shares have shed more than 6% in the last one month. Reliance Jio, which started its commercial operation previous year, has been offering customers voice calls at no charge from day one.
Jio said it is committed to implementing the most efficient telecommunications network in India and passing on the benefits of technology to Indian customers.
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The phrase 'You don't know what you have till it's gone, ' now seemingly apt for operators who charge for voice calls.
The agency maintained its negative outlook on the telecom sector and said it sees the average blended revenue per user falling 5 percent to Rs. 150 during the fiscal ending March 2018.
Trai and Jio have contended that lowering interconnect charges will bring down tariffs.
Operators do not charge customers for incoming calls, but the carrier from whose network a call originates pays the network that receives the call.
An unexpectedly deep cut to interconnection fees paid by mobile operators in India threatens to add to the problems of established players such as Bharti Airtel, Vodafone India and Idea Cellular while benefiting their archrival, newcomer Reliance Jio. "Operators would be able to offer consumers a wider variety of retail packages and tariff structures", Trai said in its explanatory memorandum, issued today as part of the regulation.