TRAI's Decision Disappoint Airtel, Vodafone

Airtel Vodafone slam TRAI’s IUC cut Reliance Jio says consumers to benefit

The Telecom Regulatory Authority of India (TRAI) has slashed the interconnection usage charges (IUC) to 6 paise.

Industry analysts said the Trai move was negative for BhartiAirtel, Vodafone India and Idea Cellular, modestly positive for Anil Ambani-owned Reliance Communications and Aircel and beneficial for Reliance Jio.

It has been observed that reducing termination rates has benefitted consumers and enhanced competition. Trai has also announced that it is planning to abolish the IUC charges on all local calls from January 1, 2020.

Bharti Airtel claimed that the "sharp drop in the IUC rate will only help transfer part of its cost to other operators, thereby further worsening the financial health of the industry". Since this time the quantum of reduction as well as the proportion of incoming calls is higher, the impact on revenues of the larger incumbents is also expected to be higher.

Kotak Institutional Equities, the institutional India brokerage, predicted that Jio, which now pays close to $1 billion in interconnection fees, will save $550-$600 million (30-33 rupees per user) annually as result to the new charges.

Jio, which began charging for data April 1, took another swing at rivals earlier this year by offering a US$23 4G-enabled feature phone with tariff plans as low as 23 rupees for two days or 153 rupees monthly.

Vodafone India Ltd, India's second largest carrier, said it would weigh its options in response to the change.

The government introduced IUC charges in 2003 on goal to ensure continuous investments from telecom operators in network expansion and upgradation. The Indian telecoms industry is already experiencing the greatest period of financial stress in in its history.

The established operators such as Bharti Airtel and Vodafone have contended that telecom infrastructure in rural areas largely depends on revenue from incoming calls, and lowering or removal of such charge will hamper services.

Jio said it was "appalling that the incumbent operators", made allegations that the new rates were not transparent and baseless.

The biggest benefactor of this decision will be Reliance Jio as the operator has more originating calls as the compared to the ones that are terminated to its network. "It will encourage new players to be more competitive as they will be liable to pay less in interconnect as their subscriber base grows".

So why did TRAI reduce the IUC charges? "It should have been implemented in 2014 as envisaged in the 2011 Report submitted by TRAI to the Supreme Court and will be six years too late", said Reliance Jio in a statement.

The IUC charges for other types of call such as wire-line to mobile, wire-line to wireline and wire-line to mobile will remain zero.

Related:

  • Small quake  reported in southern IL

    Small quake reported in southern IL

    People react as a real quake rattles Mexico City on September 19, 2017 as an natural disaster drill was being held in the capital. Local media has reported that thousands of people were out on the streets after being evacuated as a precautionary measure.
    Russian helicopter accidentally fired on spectators during war games, state TV says

    Russian helicopter accidentally fired on spectators during war games, state TV says

    RBC news agency reports that the injured people "weren't civilians", according to comments quoted by The Guardian . It did not specify when or where the incident in the video took place but said no one was hurt.
    Weekend that could determine the destination of the Premier League title

    Weekend that could determine the destination of the Premier League title

    Many neutrals are hoping to see a fitting ending to what has been a fairytale story that may even be turned into a box office film, such has been the feat of their achievements.
  • Curfew imposed in Kirkuk before Kurdish independence vote

    Curfew imposed in Kirkuk before Kurdish independence vote

    Baghdad is also angered for the inclusion of Kirkuk in the vote, a contested oil-rich city which lies between Iraq and Kurdistan . He said that Turkey began military exercises near the Habur border crossing point of the Turkey-Iraq border on September 18.
    What Got Mark Hamill to Return to the Star Wars Galaxy?

    What Got Mark Hamill to Return to the Star Wars Galaxy?

    While Luke will probably have a key role to play in the new movies, it’s certain the new actors will dominate the storyline. He felt he needed to know what all those years have done to Luke even if the material doesn’t get told in the actual movie.
    Innovative Cloud Lead Management System to Be Released by Voiptime

    Innovative Cloud Lead Management System to Be Released by Voiptime

    Head of Sales will be able to track lead statuses, assign new leads to staff members and monitor communication process. Information about all clients may be shared within sales team and passed easily from one Sales Agent to another.
  • Zone of the ENders VR Announced for PS4 and PC

    Zone of the ENders VR Announced for PS4 and PC

    When The 2nd Runner - Mars launches in the spring, most PC VR headsets should work through Valve's open SteamVR service. Zone of the Enders (2001) and Zone of the Enders 2: The 2nd Runner (2003) are the pinnacle of high speed robot action.
    Global Resource Coin

    Global Resource Coin

    In addition, from the year 2018 GRC’s cryptocurrency rate is expected to grow due to its social usefulness and relevance. In order to do this, you need to have a considerable amount of money, a special financial education and a special license.
    Wise casino advices

    Wise casino advices

    Tips casino players online You need to understand the difference between traditional casinos and online casinos. Still, the main goal, anyway, is to get a prize and the opportunity to become rich without putting an effort.
  • Ryanair's mass cancellations are a problem of its own making

    Ryanair's mass cancellations are a problem of its own making

    As alluded to earlier, Ryanair will publish this evening a comprehensive list of all flights cancelled through to the end of October.
    Walgreens wins approval to buy some Rite Aid stores in revised deal

    Walgreens wins approval to buy some Rite Aid stores in revised deal

    Wall Street is only getting more bullish on the stock, with 19 of analysts who cover WBA having a buy-equivalent rating. The firm has noticeable volatility credentials; price volatility of stock was 1.53% for a week and 1.54% for a month.
    Manchester City boss Pep Guardiola’s tactical master plan as he plots Premier League success

    Manchester City boss Pep Guardiola’s tactical master plan as he plots Premier League success

    This competition of managers started by Pep became even more interesting than the competition of their football teams. He believes that the tough competition will help him and his Manchester City team to go to the next higher level.

Comments