Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), the industry lobby that represents the interests of the mobile phone industry, termed the move disastrous and said it would invite legal action.
Mobile calls are now likely to cost less as the Telecom Regulatory Authority of India (TRAI) on Tuesday made a decision to cut interconnection usage charge (IUC) to 6 paise per minute from 14 paise earlier. As per reports, this move by the TRAI is likely to impact the overall calling charge largely. Off late, this charge has been one of the biggest factors behind the earnings of telecom operators and since the launch of Reliance Jio, this was being highly debated because Jio provides all calls for free.
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Telecom regulator Trai today slashed the interconnect charges for mobile calls from 14 paise to 6 paise from October 1, which potentially blunts the advantage that legacy players like Airtel and Vodafone have had over a new entrant like Reliance Jio because of the asymmetry in call traffic. Jio also stated that it is of the opinion that waiving the charge will benefit consumers.
"At that point, IUC was reduced from 30 to 20 (paise) and these guys went to court.so my greatest fear is once again, you are looking at litigation and that is not good for this industry", he said. A telecom operator presently charges 14 paise per minute for every incoming mobile call, called mobile termination charge (MTC), received from the other network.
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The debate over the charge was revived in August a year ago, 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. The IUC will be 6 paise per minute from October 1. Established companies including Airtel, Idea and Vodafone wanted the IUC to be increased to help recover their investments in acquiring spectrum and building networks.
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