IUC Has Nothing To Do With Telecom Tariffs: Airtel CEO

The interconnect usage charge (IUC) is not related to tariffs charged by telecom operators from users but is primarily a bilateral arrangement between operators, said Bharti Airtel CEO Gopal Vittal 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 at the sidelines of a session at the three-day India Mobile Congress that started on Monday.

Vittal’s statement follows a fresh war of words between the two operators which erupted when Jio, India’s only profitable telecom operator, last week 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 (IUC) 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 decision to levy IUC came after Trai on 18 September floated a fresh consultation paper to see if there was a need to revise the applicable date for scrapping the charge 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, set at 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks. Scrapping the charge or reducing it would benefit an operator with more outgoing traffic than incoming calls.

As of end of June, 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 levy IUC, Bharti Airtel, without naming Jio, said one of its competitors suggested that Trai reopen this issue, while the regulator in September 2017 had 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.

Meanwhile, Jio has said these charges will only continue till the time the regulator abolishes IUC.―Livemint