Airtel, Idea challenge 6 paise IUC in Bombay HC; hearing on Nov 15

Mumbai: The Bombay High Court on Friday refused to issue an stay order stopping telecom regulator Trai's directive that has cut interconnect usage charge, IUC, by 57 per cent to 6 paise form earlier 14 paise. Trai had slashed IUC on September 19.

On Thursday, Incumbent telecom operators Bharti Airtel and Idea Cellular had approached the HC seeking an injunction, while also requesting the court the order be put on old till they are given a proper hearing in the matter.

An IUC is a call connecting fee that a source network pays to the destination network for receiving and ending the call. IUC was 14 paise in effect since March 2015, year in which IUC rate was brought down from 20 paise per minute to 14 paise per minute.

Trai had already filed caveats at all high courts in country in anticipation that incumbents will approach court against its decision to fix IUC at 6 paise. The court has instructed Trai to submit its reply by November 3 and has posted the matter for hearing on November 15.

According to a report in The Financial Express, Bharti Airtel and Idea Cellular have alleged in their plea before the HC that "drastic" reduction in IUC or call termination charge will further deteriorate state of already frail telecom sector.

Trai's decision that brings down IUC from 14 paise to 6 paise, a 57 per cent cut, will benefit only one telecom operator, Relaince Jio, they alleged. It has also been alleged that Reliance Jio would save Rs 5,000 crore due to lower IUC rate whereas the incumbent telecom companies will incur a loss of Rs 4,000 crore.

Since Jio's arrival on India's telecom landscape, the number of outgoing calls made from these incumbent operators has nosedived. As per an estimate, post-Jio launch, as much as 92 per cent of outgoing calls are made from Reliance Jio while a meagre 8 per cent outgoing calls are made from networks of incumbent telecom operators, the report added.