After Trai cuts MTC to 6 paise, Airtel, Idea move Bombay High Court against new IUC norms

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Published: September 29, 2017 5:01:37 AM

Bharti Airtel and Idea Cellular on Thursday moved the Bombay High Court challenging the Telecom Regulatory Authority of India's (Trai) new interconnection usage charge (IUC) which has lowered the mobile termination charge by 57% to 6 paise per minute from October 1.

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Bharti Airtel and Idea Cellular on Thursday moved the Bombay High Court challenging the Telecom Regulatory Authority of India’s (Trai) new interconnection usage charge (IUC) which has lowered the mobile termination charge by 57% to 6 paise per minute from October 1. The matter is likely to come up for hearing on Friday. Both the companies have urged the court to stay implementation of the new charge from October 1. In the consultation process, the companies had opposed any reduction in MTC, and instead made a case for its hike to 30-35 paise per minute to reflect full cost of handling calls. On September 19, Trai had slashed MTC by a massive 57% to 6 paise per minute from the current 14 paise per minute, a move which would render a loss of over Rs 4,000 crore annually to the three big incumbents — Bharti, Vodafone and Idea — while leading to an annual saving of around Rs 5,000 crore to Reliance Jio.

Trai for the first time has also laid out its future course of action by stating that termination rates would become zero (bill and keep in technical parlance) from January 1, 2020. Termination charge is paid to the operator on whose network the call terminates by the originating network. This charge has been on a declining spree for the last several years. However, the entry of Jio last year and its free services led to asymmetric calls – around 92% calls from Jio terminate on the networks of incumbents, while only 8% calls of the latter terminate on Jio’s network.

When the regulation had come earlier this month, analysts had indicated that the telecom operators will be approaching the courts for relief. This led to demands by the incumbents to raise the termination charge as it is below cost, leading Jio to choke their networks.

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