The trigger to the latest slugfest over IUC was Trai’s decision to review the IUC regime.
Reliance Jio has termed the move to review the interconnect regime as “retrograde”, which will work as an incentive programme to keep 400 million users to remain on 2G and not migrate to 4G. The company has written a letter to the Telecom Regulatory Authority of India (Trai), expressing its displeasure over the consultation paper to review the interconnect usage charges (IUC).
“This consultation process three months before the decision process to me is an incentivization programme to keep 400 million users continue on 2G and this also is not a progressive technology adoption process,” Mathew
Oommen, president, Reliance Jio, told Financial Express.
He added it’s the poor 2G users who have to think about points of interconnect (PoIs) and IUC as they are the ones who are paying for voice calls. Oommen further said the incumbent operators have made voice calls free for 4G users paying upwards of `100 or `120 per month, while for those 2G users doing recharges of `40, `60, etc, the voice calls are charged at `1 or `1.5 per minute.
He further said the incumbent operators are offering bundled plans and they are also extracting IUC from customers but don’t declare it specifically.
“When we decided to put the IUC charge in a non-unbundled way across tariffs, we did it in full transparency. We could have given multiple unlimited plans and people would not have realized (they are charged for IUC) but we chose not to, because I look it as in this digital world, we have to play the rules of the game differently,” Oommen added.
In its letter to Trai, Jio has said the consultation paper is neither warranted nor sustainable. “The present consultation paper subsidies and incentivizes the telecom service providers (TSPs) who, by design and astute planning, do not want to shift to IP based technology,” the letter said. The operator further said any deferment of a sunset clause will end up rewarding designed defaulters who have deliberately stayed away from new and efficient technologies.
The trigger to the latest slugfest over IUC was Trai’s decision to review the IUC regime. Trai recently came out with a consultation paper to review the interconnect regime. The regulator had last reduced termination rate in September 2017 by a massive 57% to 6 paise per minute. Prior to it the rate was 14 paise per minute. At that time, Trai had said that it proposes that from January 2020 operators move to a regime of zero rate.
Jio has questioned Trai’s jurisdiction and reasons to tinker with the original schedule for implementation of zero termination charge regime from January 1, 2020.
The operator said Trai’s review acts as an active inducement and promotes designed defaulters and acts as a punishment to those TSPs who have aligned themselves with the required technology with an endeavour to deliver the best service and at a low price to their subscribers.
In its consultation paper issued on September 18, Trai had said, “While revisiting the issue, based on the actual developments during the last two years, it needs to be decided as to whether the date 1.1.2020, earlier fixed for implementing BAK regime (zero termination charge), through IUC Regulations 2017, still holds or it requires reconsideration”. The reason behind Trai’s rethink on moving to a zero rate regime is that traffic imbalance, though reduced from pre-September 2017 days, still exists.
According to figures shared by Trai, Bharti’s incoming calls (from other networks) stands at 54.70% compared to 45.30% of outgoing calls. Jio’s incoming calls stand at 35.75% and outgoing at 64.25%, while for Vodafone Idea incoming calls are 59.30% and outgoing at 40.70%. Since termination charges are paid on the basis of outgoing calls, it can be seen that Jio has the lowest percentage of such calls so its outgo on termination is the highest. It is because of this imbalance that the incumbents are opposed to any move by Trai to reduce the termination charges to zero from January.