Trai cuts termination charge on mobile voice calls; Reliance Jio to gain

Trai cuts termination charge on mobile voice calls; Reliance Jio to gain

TRAI said the call termination charge will be applicable from next month.

Mobile Termination Charges (MTC), now 14 paise, are payable by the operator whose subscriber makes a call to the operator whose subscriber receives the call, and directly impact the tariff. "For other types of calls (such as wire-line to mobile, wire-line to wireline and wire-line to mobile) the termination charge would continue to remain zero.From 1st January, 2020 onwards the termination charge for all types of domestic calls shall be zero", TRAI said in a statement.

IUC is a fee that a mobile service provider pays another to link a call to the latter's network.

The industry body represents top telcos Bharti Airtel, Vodafone India and Idea Cellular, which seek a higher IUC, and Reliance Jio Infocomm, which favours doing away with the charge.

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Today, TRAI has announced a drop in Interconnection Usage Charge (IUC) from 14 paise to 6 paise.

Experts pegged the benefit to Jio from this decision at Rs 5,000 crore annually. These loss or gain estimates are not official figures.

Bharti Airtel, Vodafone India and Idea Cellular, who were facing a big challenge to their consumer base from Jio, were pushing for an immediate increase in IUC to 30-35 paise per minute.

Mathews said that no country in the world had a zero interconnect charge. Since the rule bars operators from charging their customers for receiving calls, the interconnect usage charge was allowed as a way to recover the cost of incoming calls.

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Reliance Jio had dismissed as "myth" the claim that incumbent telecom operators are incurring losses due to reduction in these charges and alleged that two of established operators had made "excess recovery" to the tune of almost ₹1.2 lakh crore.

Trai and Jio have contended that lowering interconnect charges will bring down tariffs. The existing operators have already been struggling because of the lowered revenue after huge cut downs in the prices of data packs and other telecom services.

"It has been observed that reducing termination rates (IUC) has benefitted consumers and enhanced competition".

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