Lost Rs 6,800 crore due to lower IUC, Airtel tells TRAI

Mumbai: Bharti Airtel in a letter to sector regulator Telecom Regulatory Authority of India or TRAI has contended that it has lost a whopping Rs 6,800 crore due to lower call termination charges, also known as Interconnection User Charges or IUC, according to a report on DNA.

IUC is a fee that a destination network charges to the source network for connecting and ending a call from the source network. Simply put, it is a cost of  incoming call which the receiving company incurs. At present, TRAI has fixed 14 paise per minute as call termination charge for the receiving companies who have petitioned the telecom regulator to increase it.

Airtel's letter to TRAI says: “Airtel has not made any gains on account of IUC. ...The misrepresentation of data is yet another attempt by Reliance Jio to distort facts to show other operators in a bad light and create policy bias in its favour.”

Incumbent telecom operators allege that Reliance Jio was the biggest beneficiary of lower IUC. However, Jio has strongly denied allegations made by these operators. They have also resented the paltry 14 paise IUC as, according to them, the actual cost of terminating a call that a telecom operator incurs was 30 to 35 paise.  

Bharti Airtel, Vodafone and Idea Cellular in one voice say that the number of outgoing calls from their networks has gone down substantially, as a big chunk of telecom customers are now making outgoing calls from Reliance Jio, which has a lifetime free voice calls making facility for customers.

Reliance Jio has backed scrapping the IUC altogether, a step that if taken will further erode revenues of the incumbent telecom operators. Jio has also blamed business model of these existing telecom companies for loss of revenues and profits.