Reliance Jio vs Airtel: Why operators are fighting over interconnect usage charges

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For all recharges done by Jio customers starting Wednesday, calls made to other mobile operators will be charged at the prevailing IUC rate of 6 paise per minute through IUC top-up vouchers till TRAI moves to Zero termination charge regime.

However, TRAI has now started re-thinking whether to bring IUC down to zero or not, which has led to significant uncertainties for RJio which has paid almost Rs 13,500 crore as net IUC charges to the other operators over the past years.

Also known as IUC, it's a small fee that one telecom operator pays to another when a subscriber makes a call from the former's network to the latter.

For prepaid users, outgoing calls to other operators will be charged 6 paise per minute from their talk time amount.

Since voice calls on the Jio network are free, the company said it had to bear the Rs 13,500 crore payment made to rivals such as Bharti Airtel and Vodafone Idea.

Reliance Jio bore the cost of IUC for the free voice calls made from its network to others'. Jio's rivals are Bharti Airtel Ltd and Vodafone Idea Ltd.

Reliance Jio has started charging its prepaid and postpaid users 6 paise per minute for outgoing calls to Airtel, Vodafone, BSNL and others.
But it has now floated a consultation paper to review whether the regime timeline needs to be extended. Reliance Jio had hoped that the IUC will be abolished by January, 2020.

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"On 19th September, 2017, when Trai reduced the IUC from 14 paise to 6 paise and proposed a move towards Bill and Keep (zero IUC) with effect from January 1, 2020, they had specifically mentioned that the Authority shall keep a close watch on developments in the sector, particularly with respect to the adoption of new technologies and their impact on termination cost".

While making the customers pay for voice calls made to any rival network, Jio said it will compensate them by giving free data of equal value. Jio post-paid connections will also have to pay the 6 paise per minute charge for outgoing calls. "We will share all data with TRAI to convince that zero IUC regime is in the best interest of consumers and how the huge number of missed calls is creating the wrong perception of asymmetric traffic", it said.

"So far, in the last three years Jio has paid almost Rs.13,500 crore (135 billion rupees) as net IUC charges to the other operators", Jio said in the statement.

The new rules will apply on all recharges done by Jio customers starting Wednesday.

"Jio will provide additional data entitlement of equivalent value based on IUC top-up voucher consumption".

"Jio again assures its 35 crore customers that the 6 paise per minute charge on outgoing off-net mobile calls shall continue only till the time TRAI abolishes IUC, in line with its present regulation".

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