The Interconnect User Charge (IUC) must be reduced to zero immediately for the benefit of the customer as well as the industry, top telecom experts said, adding that regulatory decisions have to be in line with this objective.
IUC is a charge paid by a telecom company on whose network a call originates to the company in whose network it ends. It is currently 14 paise/minute and telecom regulator TRAI wants to cut it to under 10paise/minute. It has also submitted an affidavit in the Supreme Court in favour of moving away from IUC to a Bill & Keep system.
Bill & Keep is a modern approach to interconnection charging in which the networks recover their costs only from their own customers rather than from the sending network. Such an arrangement acts to remove the wholesale cost barrier to the retail pricing for off-network calls and has been proven to result in significantly higher levels of calling activity.
Sanjay Kapoor, former CEO of Bharti Airtel, felt that reducing IUC will increase international competitiveness for businesses and bring down rates for individuals.
Industry observers also pointed out that now that IP networks and volte (Voice over LTE) has become a reality in India, the arguments for a steeper IUC doesn’t wash.
Sanjay Kapoor said that telecom sector was going through a transformation. He said that eventually IUC will die down in India, but before it does so there needs to be a shift in Indian telecom towards providing digital services. “In advanced markets revenue streams are divided between data packets and digital services and Indian companies need to move there. Once that happens IUC will die down,” he said. Kapoor said that voice is still a prime earning for a lot of incumbents but as packets take over and voice becomes a packet, both parties will share revenue.
By Baishakhi Dutta
