Reliance Communications welcomes reduction in IUC by TRAI‍

TRAI revises IUC (Interconnect charges) to 6 paise/minute, effective Oct 1

Joy for Jio, jolt to Big 3

Vodafone and Airtel have fiercely opposed the direction.

TRAI has announced a cut in mobile termination rate to 6 paise per minute effective October 1, 2017 and to zero effective January 1, 2020.

Trai believes that the reduction of the IUC, levied by a telecom operator for terminating a call from another telecom firm will benefit consumers and boost competition.

The cellular operators association of India (COAI) has called the interconnect regulation disastrous and has chose to go to the court. Reliance Communications stance on the matter is in contrast to that of the larger players like Bharti Airtel and Vodafone that have slammed the TRAI's latest decision.

In a statement, Bharti Airtel, while refraining from naming any company, said the new rate benefits a sole operator, "which enjoys a huge traffic asymmetry in its favor". "Unless mitigated, this decision will have serious consequences for investment in rural coverage, undermining the Government's vision of Digital India", Official Spokesperson of Vodafone India said.

Analysts are forecasting another price war, following what has already been a tumultuous 12 months for the market since Reliance Jio emerged. And there's a good reason why. "Thus the cost of the service providers would now need to be borne by the feature phone users who do not have the ability to use OTT applications", the regulator said.

Reliance Jio has maintained that voice calls will always be free on its network.

Operators in India do not charge customers for incoming calls, but the carrier from whose network a call originates pays the network that receives the call.

At the end of July, Jio had a near 11% share of India's wireless market, while Bharti Airtel had 24%, data from the regulator showed. TRAI stated that the increased usage among the masses will help the telecom companies recover the losses incurred by reducing IUC charges.

As per COAI (Cellular Operators Association of India) figures, Airtel had 281 million subscribers in August followed by Vodafone (208 million), Idea Cellular (191 million) and Reliance Jio (128 million). Moreover, overall voice revenue will continue to drop as a result of Jio free voice call offerings and the rising popularity of data-led "over the top" (OTT) operators.

Trai issued a consultation paper for review of the IUC on 5 August previous year to seek stakeholders' views on various aspects of the existing IUC Regulation that came into effect from March 2015.

The TRAI decision "would adversely impact the larger incumbents over the medium term, and in the process benefit the new entrant Reliance Jio", domestic rating agency Icra said.

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