Terming telecom regulator TRAI’s decision to cut mobile termination charges by 57% “retrograde”, leading telecom operators Bharti Airtel and Vodafone on Wednesday said the move would benefit just one operator and would worsen the financial health of the already stressed industry.
“We are extremely disappointed with the latest regulation on the IUC, especially at a time when the industry is facing severe financial stress,” the country’s largest telecom services provider Bharti Airtel said in a statement.
Bharti added that the interconnect usage charges (IUC) rate of 6 paise fixed by TRAI had “been arrived at in a completely non-transparent fashion and benefits only one operator which enjoys a huge traffic asymmetry in its favour.” The sharp drop in the rate would only help transfer part of “its [the beneficiary operator’s] cost to other operators, thereby further worsening the financial health of the industry.”
Commenting on the TRAI move, Vodafone said it was considering its options.
“This is yet another retrograde regulatory measure that will significantly benefit the new entrant alone while adversely affecting the rest of the industry as a whole,” it said in a statement. Unless mitigated, the decision would have serious consequences for investment in rural coverage, undermining the government’s vision of Digital India, Vodafone added.
Separately, Reliance Jio said, “There is no question of any advantage from the new IUC regulation to Jio as it has already passed on all the benefits to customers.” “References to financial stress in the industry or the need for IUC to promote rural coverage again shows the attitude of the incumbent operators wherein IUC is being treated as a subsidy that the Indian customers must pay to sustain these operators financially. On the contrary, it is a fact that the high cost IUC regime thus far has caused financial stress for the smaller and new operators,” it said in a statement.
‘Level-playing field’
Reliance Communications also welcomed the move.
“With voice calling becoming free, TRAI’s move will provide a level-playing field,” it said in a statement.
While the top operators had pitched for doubling mobile termination charges (payable by the operator whose subscriber makes a call to the operator whose subscriber receives the call) “to recover their cost,” the newer rival had suggested zero charges and shifting to the bill-and-keep regime.
Asked about the impact the move may have on the stressed telecom sector, Finance Minister Arun Jaitley said, “I have not had the benefit of reading the full reasoning, so it wouldn’t be appropriate for me to comment... It is for the concerned players to explore whatever remedies are there for them.”
