Boost to Reliance Jio free offer; TRAI may free up call tariffs from interconnect charge

By: | Published: February 9, 2017 6:21 PM

TRAI is considering de-linking the telecom call tariffs from IUC, which could be a major boost for Reliance Jio, whose free offers are alleged to be violating IUC-based tariff regime.

The IUC, currently at 14 paise per minute, acts as the floor for mobile phone call tariffs, in accordance with the TRAI rules.The IUC, currently at 14 paise per minute, acts as the floor for mobile phone call tariffs, in accordance with the TRAI rules.

The Telecom Regulatory Authority of India is considering a possibility of de-linking the telecom call tariffs from IUC (interconnection usage charges), ET Now reported citing unidentified sources. The decision could effectively be a major boost for Reliance Jio, whose free service offers are at the centre of discussions on violating the IUC regime.

The telecom operator from whose network the call is made, pays the IUC to the telecom operator on whose network the call lands. The IUC, currently at 14 paise per minute, acts as the floor for mobile phone call tariffs, in accordance with the TRAI rules.

However, Bharti Airtel Ltd and Vodafone, India’s top telecom service operators have raised complaints that Reliance Jio’s free offers violate this rule and TRAI order. The de-linking of tariffs from IUC floor may effectively render the incumbent operators’ complaints against Reliance Jio baseless.

You may also like to watch:

ET Now report said that TRAI may issue a clarification ruling that the telecom operators can charge less than 14 paise per minute, allowing Reliance Jio continue with its free offers without violating the IUC-tariff-based regime. TRAI is looking to make these changes to boost lower tariff regime in consumer interest, ET Now report said.

The top telecom operators including Airtel and Vodafone are already engaged in a court case against TRAI for cutting the IUC to 14 paise from 20 paise per minute in 2015. Lower IUC hurts the bigger telecom companies more than the smaller or the new ones, as the incumbents have more subscribers and a majority of the mobile telephone calls terminate on their networks, earning them that revenue.

You may also like to watch:

Reliance Jio’s entry into the telecom space has forced the incumbent players to drastically cut tariffs – as much as by 66% – in order to retain their customer base, and has put the entire sector under tremendous pressure of choosing between protecting margins and user base. Reliance Jio recently extended its inaugural free voice and data plan till March 31 drawing complaints and criticisms from its biggest rivals Airtel, Vodafone and Idea, who assert that its anti-competitive practices and freebies are hurting the industry. Vodafone earlier went as far as to write down the value of its India business on hyper competition from the new entrant.

Earlier this month, the TDSAT (Telecom Disputes Settlement and Appellate Tribunal) reportedly directed TRAI to submit its decision on allowing or banning Reliance Jio free service offers. TDSAT was hearing a complaint by Airtel against TRAI for giving a clean chit to Reliance Jio’s free voice and data offers.

 

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition