IUC cut disastrous, incumbent telcos may move court: COAI

20 September, 2017, 01:05 | Author: Devin Moran
  • Reliance Jio welcomes TRAI cutting IUC charges suggests customers will be final beneficiary

"It has been observed that reducing termination rates (IUC) has benefitted consumers and enhanced competition". TRAI said the call termination charge will be applicable from next month.

Mobile calls are now likely to cost less as the Telecom Regulatory Authority of India (TRAI) on Tuesday made a decision to cut interconnection usage charge (IUC) to 6 paise per minute from 14 paise earlier. A telecom operator presently charges 14 paise per minute for every incoming mobile call, called mobile termination charge (MTC), received from the other network.

Reliance Jio, which is a new entrant in the telecom space, demanded scrapping of the interconnect usage charges (IUC).

September 19: The Telecom Regulatory Authority of India (Trai) on Tuesday slashed the interconnect usage charge (IUC) from 14 paise minute to 6 paise per minute, which will become effective from October 1. The older telecom players wanted it raised to at least 30 paise per minute. While the new charges come into effect from October, the regulator has even laid the foundation to do away with the IUC altogether: the charges have been ordered to go down to zero from January 1, 2020. Established companies including Airtel, Idea and Vodafone wanted the IUC to be increased to help recover their investments in acquiring spectrum and building networks.


The IUC mainly consists of termination charges, originating charges and carriage/transit charges.Interconnection allows subscribers, services and networks of one service provider to be accessed by subscribers, services and networks of the other service providers.

"Whatever the Trai does, another court battle is on the cards".

The telecom regulator had reduced the interconnect charges in 2015 to just 14 paise a call, much to the chagrin of state-run entities BSNL and MTNL as it reduced their revenues drastically.

TOI was the first to report on the impending cut in IUC charges in its edition dated August 13. Jio also stated that it is of the opinion that waiving the charge will benefit consumers. This is expected to bring down mobile call costs in coming days.

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