Mathew Oommen, Jio’s President-Networks
Mathew Oommen, Jio’s President-Networks

TRAI’s move to review scrapping IUC is regressive, will hurt consumers: Jio

  • Mathew Oommen, Jio’s President-Networks, said the concept of point of interconnect and interconnect usage charge is related to 2G technology and hence obsolete
  • Jio believes the IUC will subsidize operators which manage inefficient, voice-only networks

New Delhi: The telecom regulator's move to re-examine the decision of scrapping interconnect usage charges from 1 January, 2020 is a regressive step and will further the digital divide in the country, a top Jio official said on Tuesday.

"Starting a fresh consultation process just 3 months before the date to implement the decision (to scrap IUC) is an incentivisation programme to continue to keep 400 million customers on 2G networks without digital connectivity," Jio’s President-Networks, Mathew Oommen said in an interview.

"This is not a progressive technology adoption process," Oommen said, adding that the concept of point of interconnect and interconnect usage charge is related to 2G technology and hence obsolete.

Oommen's scathing attack on the regulator comes in the midst of a fresh battle that has erupted among operators after the Telecom Regulatory Authority of India last month said that it would start fresh consultation with stakeholders to see if there is a need to revise the applicable date for scrapping IUC, given the continuing imbalance in inter-operator traffic.

Airtel and Vodafone Idea have welcomed Trai's regulatory rethink.

In September 2017, Trai had ordered a reduction in IUC to six paise per minute from 1 October 2017 from 14 paise earlier and an end to it from 1 January 2020. Telecom operators, already reeling from a fierce price war that started with the entry of Reliance Jio in September 2016, were hit hard by the order. At the time Trai decided to scrap IUC, Airtel, Vodafone and Idea had resisted the change, while Jio was in favour.

"If IUC is not scrapped, it is unfair to the carrier and to the customers...There are 400 million people that are still on 2G networks and hence digitally unconnected...the guys (telcos) in the 2G world are thinking about IUC," he said, adding that the industry will become obsolete if operators don't invest in their 4G networks.

"Why are incumbent operators managing several networks," Oommen said.

IUC, at 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks. Scrapping the IUC or reducing it would benefit an operator such as Jio which has more outgoing traffic than incoming calls. Bharti Airtel Ltd and Vodafone Idea Ltd earn a portion of their revenue from IUC as their incoming traffic is higher than outgoing.

Jio however believes the IUC will subsidize operators which manage inefficient, voice-only networks.

"2G customers at the bottom of the pyramid who recharge for 20 or 30 rupees are the ones continue to pay for voice calls. Tariffs plans above 120 are unlimited plans so you don't know what you are being charged for (voice or data)," he said.

Jio is the only pure-4G network in India. Vodafone Idea operate 2G, 3G and 4G networks. Airtel operates 2G and 4G and is in the process of phasing out 3G networks by March 2020.

"The industry, the regulator, and the whole framework have to together decide when we move from 2G to 4G rather than deliberating now about 5G because if you don’t have the baseline of all IT and all VoLTE, I’m not sure how you will do 5G," Oommen said.

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