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Mobile Call Connect Charges Slashed By Nearly 60%. How It Affects You

20 September 2017, 01:06 | Clyde Nash

TRAI revises IUC (Interconnect charges) to 6 paise/minute, effective Oct 1

Telecom operators to seek legal help against TRAI's IUC slashing

Mobile calls are now likely to cost less as the Telecom Regulatory Authority of India (TRAI) on Tuesday chose to cut interconnection usage charge (IUC) to 6 paise per minute from 14 paise earlier. ".if you reduce the termination charge, the principal beneficiary is Jio because they are the ones dumping traffic onto other networks".

Prior to the Telecom Regulatory Authority of India' decision on Tuesday to cut mobile interconnect usage charges (IUC), Singapore Telecommunications Ltd (Singtel), one of the largest investors and stakeholders in Bharti Airtel, had written a letter to Telecom Minister Manoj Sinha asking him not to do slash IUC.

This come as a big blow to both Airtel, Vodafone and Idea cellular.

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"It was a disastrous move. most of the members had indicated that they would probably move court for redressal in the matter because this type of hit to the financial statements of major operators is clearly not something that they can sustain and that has been made very clear to the regulator", COAI Director General Rajan Mathews said.

Losses to BhartiAirtel, Vodafone and Idea were estimated at over Rs 1,000 crore each. The new charges will be applicable from October 1, the regulator said in a notification.

The debate over the charge was revived in August previous year, when Trai issued a consultation paper proposing to review it. Reliance Jio, the latest entrant in the telecom market, wanted the charge to be lowered and the existing calling-partypays regime eventually scrapped. It is paid to the telecom operator who receives the call. The reduction in interconnect usage charge will benefit Jio, for which the charge was a huge liability. However, the older telecom players argue that costs are rising in the telecom business and a cut in interconnect charges will not make any difference to call charges. "Operators would be able to offer consumers a wider variety of retail packages and tariff structures", Trai said in its explanatory memorandum, issued today as part of the regulation.

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