TRAI defers abolition of telecom interconnection fees by a year

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A new update in the telecom industry by Telecom Regulatory Authority of India (TRAI). It has decided to postpone the execution of free interconnect usage charges (IUC) by one year till January 1, 2021. The operators pay these charges to each other for calls done from one network to another. This was previously planned to get away with these charges from 2020, but now they would seek stakeholders’ views on abolishing the fees.

So, 6p charge per minute for the connection between two operators will now be there for another year. This decision will surely give some relief to Vodafone Idea and Bharti Airtel, as they will now get the revenue as before. They are the older operators; however, Reliance Jio (a newer one) can see this as a setback. The decision is welcomed by all, including the Cellular Operators Association of India (COAI).

IUC rate was earlier at 14p and then being reduced to 6p in 2017. Even then, the industry suffered losses. Now, if the charge is removed, the telecom sector will be majorly affected by around Rs 3,672 crore. When there is no IUC, it will benefit an operator more that has mostly outgoing traffic. No, IUC means that operators would now not make any cash for getting calls on their networks. Asymmetry is also seen in the inter-connection of operators. So, keeping in view these factors, along with the consumers’ interest, and for the sustainable growth of the telecom sector, TRAI considered postponing the decision.

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