Mobile call prices may crash as Trai mulls 3 paise IUC

The Telecom Regulation Authority of India (Trai) is set to cut the interconnect fee between service providers, which would translate into cheaper calls and for mobile phone users.

According to The Times of India,  Trai has decided to reduce the interconnect charge from 14 paise per minute to less than 10 paise per minute, which will impact the overall calling charges.

However, sister publication The Economic Times pointed out that any IUC revision would not directly lead to a change in consumer bills, which are mainly a function of demand and supply.

''Any change in input cost alone may not lead to change in consumer bills, which are primarily driven by market forces, that is, demand and supply. Tariffs in India are anyways among the lowest in the world,'' ET cited Prashant Singhal, global telecom lead at EY, as saying.

Trai chairman R S Sharma said recommendations on interconnect usage charge should be finalised by August-end, with ET's sources stating the calculation of costs for arriving at the fee is still on. ''We will bring out the findings by the month end,'' Sharma said.

The IUC, a charge paid by the operator of a network from where a call originates to the telco where it terminates, is currently 14 paise a minute. Trai is holding consultations on revising or scrapping the charge, in keeping with the evolution of network technology.

It has been a contentious issue, with Reliance Jio terming it an ''artificial barrier''. It should be noted that Jio with its free-for-lifetime calling plans runs up a massive bill due to the IUC cost of its users' free calls.

Other companies like Airtel, Vodafone and Idea demanded an increase in the IUC as they earn a major chunk of their revenue from it. Bharti Enterprises chairman Sunil Mittal in a letter to TRAI Chairman RS Sharma wrote that the current IUC rate is already below cost and requested the regulator to set the rate through 'a fair and transparent mechanism'.

In 2003, Trai opted for a Calling Party-Pays (CPP) method in which incoming calls were free. In 2004, it was set to 30 paise per minute, cut 20 paise per minute in 2009 and to 14 paise per minute in 2015.

The Times of India quoted a source to say that even 14 paise per minute is too high in the present scenario as data rates have crashed and networks are moving towards VoLTE-based 4G. According to this source, there is a strong chance of reducing the IUC to as low as 3 paise per minute.