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Vodafone plea on IUC dismissed

Staff Reporter, New Delhi
07/09/2017   0 Comments

In a big setback to Vodafone India, Delhi High Court has dismissed its plea for Trai to disclose IUC or Interconnect Usage Charges methodology
This is not just a setback for Vodafone , its a  setback for the other two incumbents Airtel and Idea as well even though the petition was filed by Vodafone. The three telcos, had urged Trai to disclose the methodology for the sake of transparency and fair play but the regulator had rejected the plea.
With the dismissal, Trai can now go ahead and come out with its regulations on IUC for which it has conducted all the required consultative process. But the telcos can approach the court once the regulation comes. It is widely expected that the mobile termination charge under IUC would come down to below10 paise per minute from the current 14 paise and Vodafone and the other two telocs pushing their case to raise the charges saying the current rates are below cost . Termination charge is paid to the operator on whose network the call terminates by the originating network.
The entry of Reliance Jio last year and its free services led to asymmetric calls — around 92% calls from Jio terminate on the networks of incumbents while only 8% calls of the latter terminate on Jio’s networks.
This has led to demands by the incumbents to raise the termination charge as it is below cost, which has led Jio to choke their networks. If the charges are hiked, incumbents would get more as termination rate from Jio and they feel this would act as a deterrent for Jio to continue with free calls. However, if the charges are lowered it would be beneficial for Jio as its outgo towards termination would get reduced.
While incumbents have pitched for higher, cost-based termination charge of around 30-35 paise per minute, Jio has advocated zero rate which is called bill and keep (BAK).
Bharti chairman Sunil Mittal, Aditya Birla Group chairman (owners of Idea) Kumar Mangalam Birla and global CEO of Vodafone Vittorio Colao writing to Trai chairman RS Sharma and telecom minister Manoj Sinha against the BAK model. Jio also accused these telcos of gaining much due to IUC charges. In a letter to TRAI yesterday, Airtel said it has not made any gain rather losses due to low IUC of 14 paise a minute.


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