India Markets closed

Presence of interconnect charges give telcos little incentive to upgrade their networks and improve customer service

SS Sirohi

TRAI floated a Consultation Paper on Review of Interconnection Usage Charges (IUC) on 18 September this year, with a focus on the need for review of the date of applicability of Bill & Keep (BAK) Regime in respect of wireless to wireless terminating calls (BAK is to be implemented from 1 January 2020 as per the current IUC Regulation) and any related issues on domestic IUC.

It is a bit difficult to understand as to why, at this stage when there is no trigger or compelling reason, the Authority has started having qualms about its own well-thought of IUC Regulation, 2017 brought out after exhaustive, extensive consultation with all possible stakeholders and comprehensive consideration of all factors. The underlying basis of the Regulation was the maximisation of consumer welfare (i.e. adequate choice, affordable tariff and good quality of services) in a sustained manner and adoption of more efficient technologies are vital for orderly growth of telecom services sector in the country. The Authority had then rightly stated 'if cost-based domestic termination charge is continued for long, it would hamper the movement of sector towards (1) deployment of more efficient technologies; (2) more innovative and customer friendly tariff offerings; and in turn, it would be detrimental to the growth of telecom services sector.

Ideally, BAK was very much due for implementation in September 2017 itself as TRAI was nurturing such intent from 2012 onwards. However, TRAI opted for its introduction in a time-bound manner by giving over two year period to telecom service providers (TSPs) with a view that TSPs would upgrade their network to 4G, although it was not necessary. For the meantime up to 31 December 2019, IUC was fixed at Rs 0.06 per min for off-net termination.

Also See: Reliance Jio IUC regime change explainer: Here’s everything you need to know

TRAI's insistence to reconsider interconnect charges is anti-consumer, anti-technology

Jio to charge 6 paise per minute for voice calls made to another phone networks

Read more on News & Analysis by Firstpost.