Since Mukesh Ambani led Reliance Jio entered the Indian market with its free voice calling and unlimited data plans, everything in the country’s telecom industry is going haywire. There are clearly two factions that have formed in India’s telecom space - one is Reliance Jio and the other is a joint force formed by incumbent telecom operators and COAI (Cellular Operators Association of India).
The Telecom Regulatory Authority of India (TRAI) had recently floated a paper considering removing the Interconnect charges for VoLTE calls. The 14p cost incurred for the same, makes for a huge part of the revenue generated by operators and the proposed TRAI regulations are set to favour operators like Jio.
Now, as per reports, COAI has asked TRAI to put the review of interconnection usage charges (IUC) on hold for the moment and that the same should be deferred by a few months. In its submission to the regulator, the industry body representing telecom operators in India has stated that more clarity is needed on “several issues” before a review of the IUC policy can be made.
Word is that COAI and incumbent operators have also appealed to the regulator to take actual network costs incurred into consideration while deciding the Interconnect rates, a price paid by one telecom operator to another in order to connect calls. This cost-based model will take into account overheads, spectrum costs, capital costs and operating costs incurred by operators, thereby raising the overall interconnect charges. Insufficient interconnect points provided by incumbent operators like Airtel, Vodafone and Idea is the reason behind huge call drops on Reliance Jio’s 4G-only network. In addition, Reliance Jio has taken a different stand on IUC and wants to take a ‘Bill and Keep’ approach to determine these charges.
As per PTI, the COAI submission states, “We believe that an IUC or MTC (mobile termination charge) exercise when conducted should be based on a comprehensive costing review...the results of 2014, 2015 spectrum auctions were not factored in by the authority in 2015 calculation.”