The termination charge for wireless to wireless domestic calls shall be zero from January 1 onwards. Until now operators paid Interconnection Usage Charges (IUC) of 6 paise per minute on mobile calls.
IUC is the cost that a mobile operator pays to another operator for carrying through/ terminating a call. If a customer of Mobile Operator A calls a customer of Mobile Operator B and the call is completed, then A pays an IUC charge to B for carrying/facilitating the call. Essentially, it is the originating network compensating the receiving network for cost of carrying the call. In India IUC is set by the TRAI.
IUC was introduced at a time when some operators had a larger network footprint compared to new players. In such a scenario, the larger operators had to be compensated for the investments it had to enable call completion. However, over the years this gap between operators has reduced. All the remaining operators have identical network footprint when it comes to voice calls.
Also read:
TRAI’s original deadline to phase out IUC was January 1, 2020. In September, it undertook a review of the same and its consultation paper mentioned that the progress of VoLTE adoption has been slower than expected, suggesting that it may keep the IUC regime until December 31, 2020.
For mobile users, this means that all voice calls will be free from now on. While almost all operators had already started offering unlimited calls as part of their bundled pack, some were charging the 6 paisa from consumers for paying IUC charges. From January 1, operators will stop collecting the charges. But other than that there will not be any significant gain for users. Tariff packs available in the market already offer data with unlimited voice calls.
Also read: India’s external sector gloom amidst the global pandemic
For the operators, the end of IUC regime will lead to easier operations. Many legal battles have been fought in the past over disputes related to IUC charges. Now, the operators can keep whatever money they collect from consumers without having to keep a tab on where the call is terminating. The change in billing system will not have any significant impact on operators revenue. If this regime had come into effect two years back then it would have led to huge losses for Airtel and Vodafone Idea as their networks were larger than other operators. They were net receivers of IUC charges until 2019. But over the last year, the equation has changed with Reliance Jio overtaking the two operators.