Trai’s rethink to scrap IUC will sabotage PM’s Digital India mission: Reliance Jio


The Telecom Regulatory Authority of India’s (Trai) rethink to scrap interconnect usage charges is unwarranted, arbitrary and anti-poor and not only affects the credibility of the authority but also sabotages the government’s Digital India mission, Reliance Jio has alleged.

In a letter written to Trai, the telecom operator said that if the authority does not scrap IUC, there will be little incentive for mobile service providers to invest in technology migration as long as the returns are assured to them in the form of this subsidy.

“The consultation paper aids and abets sabotage of the Prime Minister’s Digital India mission because it protects and perpetuates the vested interests of certain incumbent telecom operators who do want their large body of 2G customers to forever remain digitally disempowered and deprived of the fruits of the Digital Revolution,” Jio said in the letter dated 18 October.

Mint has seen a copy of the letter.

The letter contains Jio’s official response to the consultation paper floated by Trai on 18 September to see if there is a need to revise the applicable date for scrapping IUC from 1 January, 2020, given the continuing imbalance in inter-operator traffic.

In September 2017, Trai had ordered a reduction in IUC to six paise per minute from 1 October 2017 from 14 paise earlier and an end to it from 1 January 2020.

Telecom operators, already reeling from a fierce price war that started with the entry of Reliance Jio in September 2016, were hit hard by the order. At the time Trai decided to scrap IUC, Airtel, Vodafone and Idea had resisted the change, while Jio was in favour.

IUC, at 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks.

Scrapping the IUC or reducing it would benefit an operator such as Jio which has more outgoing traffic than incoming calls. Bharti Airtel Ltd and Vodafone Idea Ltd earn a portion of their revenue from IUC as their incoming traffic is higher than outgoing.

Airtel and Vodafone Idea, which are currently battling shrinking revenue streams thanks to Jio’s cut-throat tariffs, have welcomed Trai’s regulatory rethink.

Jio, however, has alleged that perfect traffic symmetry is statistically impossible and Trai’s rethink will result in “protectionism which is bound to result into technology stagnation” which will jeopardise Digital India programme.

In a scathing attack on the regulator, Jio has also said that it is “unfortunate that instead of profiting the poor and marginalised sections of Indian society, the consultation paper has chosen to help profiteers in the telecom business”.

Jio, which is the newest entrant and the only profitable telecom operator, has also alleged that incumbent operators are deliberately keeping users on 2G networks and that the date to scrap IUC – 1 January, 2020, must be adhered to.

“This is a malicious intent to keep a large number of subscribers on the per minute calling plans by forcing them to use 2G voice technology and ensuring they make missed calls to Jio’s network in order to perpetuate traffic asymmetry which can be used to justify the continued use of the subsidy given to them in form of IUC charges,” Jio said.

Jio is the only pure-4G network in India. Vodafone Idea operates 2G, 3G and 4G networks. Airtel operates 2G and 4G and is in the process of phasing out 3G networks by March 2020.

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