IUC not a revenue source for telecom companies; clarifies TRAI

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Kunwar Prithvi Singh Chauhan
Part time journalist, full-time observer. Editor-in-Chief at The Indian Wire. I cover updates related to business and startups.

Lashing out at the telecom companies for criticising the move of cutting down IUC (Interconnect charges to 6 paise/minute), TRAI has stated that it’s time telecom companies stop considering IUC as a source of revenue. However, the earnings by IUC should be considered as a reimbursement for the terminated calls on the network where calls are being made.

In a statement, Sunil Kumar Gupta, Secretary TRAI said that IUC is not a scalable revenue model and it should be considered as the reimbursement of the work done. Adding that the earnings made by IUC should not be considered as profit or loss-making factors, he said that the latest regulation by TRAI of cutting down the IUC should not be considered as favouring one operator and being against the other.

Interconnect usage charge (IUC) is a fee paid by the telecom operator which receives a call to the operator from where the call is originating. Off late, a major chunk of revenue is being generated by this medium for the telcos like Airtel, Idea and Vodafone. Reliance Jio has been against the IUC charges ever since its launch because it does not charge anything from its users for calling. The scrapping of IUC can help Jio save a lot of money which it pays to the other telecom operators and at the same time, the scrapping of IUC can make the other telcos lose a chunk of their revenue.

TRAI has declared that the IUC charges will be calculated at 6 paise/minute starting October 1st and the same will be completely scrapped from January 1st, 2020. Telcos like Airtel, Vodafone and Idea termed it a conspiracy against them and a move which supports only Reliance Jio. The big 3 telecom companies were betting for increasing the IUC charges to at least 35 paise/minute.

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