IUC Has Nothing To Do With Tariffs: Airtel CEO

Interconnect usage charge (IUC) is not related to the tariff charged by telecom operators from users and is simply a bilateral arrangement between operators, Bharti Airtel chief executive Gopal Vittal said on Tuesday.

“IUC has nothing to do with tariff. It’s a clearing house for the cost of carrying the call. It’s a bilateral thing between carriers,” Vittal said on the sidelines of a session at the India Mobile Congress on Tuesday.

Vittal’s statement comes a week after a fresh war of words erupted between Airtel and Reliance Jio after the latter, India’s only profitable telecom operator, said it will start charging for calls made to rival networks at 6 paise a minute, reneging on a promise to keep voice calls free for its customers.

Jio said it “had been compelled most reluctantly and unavoidably” to do this following the decision of the Telecom Regulatory Authority of India (Trai) to review the date for scrapping interconnect usage charge from 1 January 2020, which has led to regulatory uncertainty.

“Over the last 20 years, the IUC has always been absorbed in the cost of doing business and the tariff is what it is,” Vittal said.

Jio’s move came three weeks after Trai on 18 September floated a fresh consultation paper to see if there is a need to revise the applicable date for scrapping IUC, given the continuing imbalance in inter-operator traffic.

“As far as IUC is concerned, there is a consultation paper that Trai has released. We await the outcome of that,” Vittal said.

IUC, which has been set at 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks.

Scrapping IUC or reducing it would benefit an operator with more outgoing traffic than incoming calls.

As of June-end, 64% of Jio’s total traffic was outgoing.

Bharti Airtel and Vodafone Idea would stand to gain if Trai decides to postpone the date of scrapping IUC as these telecom operators get more incoming calls than outgoing.

Immediately after Jio’s announcement to charge for calls, Bharti Airtel, without naming Jio, said that one of its competitors suggested that Trai reopen this issue, while the regulator had in September 2017 already said it might undertake an exercise to revisit the matter at a later date.

“Clearly, this off net charge being levied, therefore, is to force IUC to be brought down despite the heavy burden it puts in the receiving network. We are grateful that this very timely consultation paper to reassess IUC has been issued by Trai,” Airtel had then said.

Jio has said that these charges will only continue till the time the regulator abolishes IUC.

―Livemint