Telecom body defers zero IUC by a year

The deferment is a big relief for Vodafone Idea and Bharti Airtel, which had pitched for postponing it.   | Photo Credit: Reuters

In a major relief for telcos, particularly Bharti Airtel and Vodafone Idea, the Telecom Regulatory Authority of India (TRAI) on Tuesday deferred implementation of zero-interconnect usage charge regime by a year, besides kick-starting a consultation on the need to fix minimum tariff for mobile calls and data.

“For wireless to wireless domestic calls, termination charge would continue to remain as ₹0.06 per minute up to December 31, 2020...From January 1, 2021 onwards the termination charge for wireless to wireless domestic calls shall be zero,” the regulator said.

The BAK (bill and keep) or zero IUC regime was to come into effect from January 1, 2020. The deferment by a year will be a huge relief for Vodafone Idea and Bharti Airtel, who had pitched for postponing the implementation. However, Reliance Jio was in not in favour of deferring it. “Implementation of BAK from 1.1.2020, with present inadequate adoption of 4G technologies by consumers and asymmetries in traffic, may affect level playing field amongst service providers and in turn the effective competition in the market,” TRAI said in the regulation.

It added that in such capital-intensive sector, which had long gestation period and where entry of new service providers in the short run was difficult, maintaining effective competition among service providers was necessary for ensuring the affordable services to consumers.

Floor price for tariffs

In its new consultation, the regulator has sought stakeholders’ view on issues related to fixing a minimum tariff for mobile voice calls and data services. TRAI has also sought answers on whether there is a need for “price ceiling” as well to safeguard consumer interest along with ensuring the orderly growth of the sector.

The authority is also raised a question on whether floor prices need to be set, given that the three private telcos had recently announced price hike in the range of 15-50%. “In the last few months, many concerns have been raised about the health of the Indian telecom sector and the need to fix a floor price for telecom services,” TRAI said, adding that the DoT recently forwarded to the regulator representations received from the telcos, including a plea seeking floor tariff fixation.

“Most economists also advise against the fixation of price controls as it leads to economic inefficiencies, consumer harm, market distortions and reduced innovation,” it said.

However, it added, ensuring the provision of ever-increasing data consumption and a good quality of service required a lot of investment in maintaining and improving telecom infrastructure.

Comments on the issues raised in the consultation paper are invited by January 17, 2020 and counter-comments by January 31, 2020.

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Printable version | Feb 27, 2021 10:40:17 AM |

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