Network OperatorsTRAI gets government support on IUC issue

TRAI gets government support on IUC issue

The Telecom Regulatory Authority of India (TRAI) has received approval from the government for its move to reduce Interconnection Usage Charges (IUC). The administration is of the opinion that this fee can be lowered without any difficulty and has lent their support to the body.

IUC is paid by a telecom operator to another network when subscribers place a call between them. At present, these are fixed at Rs 0.14 per minute. Lowering them will mean that any new entrant on the block pays a negligible amount to the existing players. Bigger companies may lose out on revenue if this scheme is implemented as IUC forms a considerable share of income.

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This is exactly the reason why dominant providers like Idea, Vodafone and Airtel are opposed to the prospect. The TRAI’s secondary proposal to completely eliminate the IUC system has also not gone down well with the above mentioned firms and they have accused the authority of being biased towards upcoming businesses like Reliance Jio.

Smaller telecom networks like Telenor and Aircel are in favor of the reduced IUC policy. These operators will thrive hugely on lower interconnection rates and hence the dominant companies are largely ignoring them in the tussle.

Also Read: Reliance Jio asks TRAI to take action against telcos

Looking at all the above aspects, the government is eager for a cutback in IUC as it was a tactic to increase network utility. Now that services have expanded considerably, the interconnection charges can be decreased. However, the administration will not actively be a part of the issue as that would mean interference in the autonomous status of the TRAI.

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