Idea tells Trai to fix IUC by separating VoLTE, other networks
New Delhi: Giving a fresh twist to the ongoing tussle over interconnect usage charges (IUC), Idea Cellular Ltd on Thursday wrote to the telecom regulator asking it to evaluate IUC by bifurcating the calls terminating on VoLTE networks (where Jio has a huge presence) and those terminating on time division multiplier (TDM) networks using 2G, 3G or 4G technology (which the rest of the industry follows).
Then, based on cost data and weightage between the two, an IUC can be arrived either using fully-allocated cost or long-range incremental cost. This weightage can be reviewed every 12 months for high frequency, taking the previous months traffic data as the basis. The respective costs of VoLTE and TDM can make do with a lower frequency of review, say, once in 36 months, Idea said.
The other solution to the problem that Idea offered was to allow each operator to segregate the minutes ending on their network between VoLTE and TDM calls. The regulator can then separately determine IUCs for both.
“Both solutions overcome legal infirmities, meet the requirements of fairness and comprehensively reflect the market dynamism the consultation process is seeking to address. Yet Solution-1 (to evaluate IUC by bifurcating the calls terminating on VoLTE and rest) has the advantage of simplicity and ease of administration. So, Solution-1 is preferable for the next three to four years,” Himanshu Kapania, managing director, Idea Cellular Ltd, said in a letter to R.S. Sharma, chairman, Telecom regulatory Authority of India. A copy of the letter has been reviewed by Mint.
According to Kapania, TDM-based networks using 2G, 3G, 4G technology are currently terminating over 95% of voice traffic; and the newer VoLTE-based 4G network, currently ends less than 5% of voice traffic.
The telecom industry is involved in a war of sorts over interconnection usage charges, paid by the telecom firm which originates the call, to the one which terminates the call, currently set at 14 paise. Older telecom firms want it to be raised to at least 30 paise, while new entrant Reliance Jio wants it cut to zero. Reliance Jio Infocomm Ltd said in July that India’s top three telecom firms earned Rs1.04 trillion in the past five years by not implementing a 2011 regulatory road map to cut IUC to zero.
Mukesh Ambani-controlled Jio is pressing for the bill-and-keep model (BAK), wherein IUC will be effectively scrapped.
“A BAK regime would benefit only one operator at the cost of all other existing operators due to persisting high asymmetry of voice traffic in the range of 9-10:1, even after one full year of operations and a large subscriber base,” Kapania said, adding that the IUC is a zero sum inter-operator settlement with nil impact on consumer tariffs.
Airtel declined to comment. An email sent to Jio remained unanswered till press time.
- Dow Jones hits 26,000 milestone as earnings optimism feeds rally
- Hindustan Unilever served GST profiteering notice
- Global IT spending to touch $3.68 trillion this year: Gartner
- GE to take $6.2 billion charge after being burned by insurance
- GST: 6 more states join e-way bill system, GSTN starts trial run