- IUC fees are set by India’s Telecom Regulatory Authority (TRAI) and is currently set at 6 paise per minute.
- Jio ‘s decision has provided a good chance for the other two telcos to raise tariffs.
- However, there will be no charge on the incoming calls, Jio to Jio calls and landline calls
More than 350 million Reliance Jio users will now have to pay 6 paise per minute interconnect usage fee (IUC) as India’s largest telecom company is expecting to recover these charges from their subscribers.
However, there will be no charge on the incoming calls, Jio to Jio calls, Jio to landline calls and calls made using WhatsApp and similar platforms.
Chairman of Reliance Industries Mukesh Ambani had earlier offered free unlimited voice calls on the Jio network.
What is IUC?
IUC is the fee paid to another mobile operator by one mobile operator when its customers make outgoing mobile calls to users of the other operator. These calls are known as mobile off-net calls between two different networks. IUC fees are set by India’s Telecom Regulatory Authority (TRAI) and is currently set at 6 paise per minute.
Over the past three years, Jio has billed the other operators nearly Rs 13,500 crore as gross IUC charges. Jio’s net cost of interconnecting stood at roughly Rs 851 crore in the quarter of June, down 23 percent sequentially as total voice traffic to its network increased compared to rivals, owing to its strong subscriber add-ons. Jio is now the largest telco by users.
For additional IUC minutes, all Jio customers who wish to call either Vodafone Idea or Airtel will have to purchase an additional Rs 10, Rs 20, Rs 50 and Rs 100 top-up vouchers.
Jio’s decision to recover IUC from customers could have a cascading effect in indirectly pushing up tariffs. In hiking voice prices, Airtel and Vodafone-Idea can easily respond to Jio’s bid, finally ending the era of free voice tariffs,” said Rajiv Sharma, head of research at SBICap Securities.
A senior industry executive said Jio’s decision has provided a good chance for the other two telcos to raise tariffs.
The operator is even giving 1 GB free data for every 10 rupees spent by its users. Following are the top-up vouchers for customers:
|IUC Top-Up Voucher Amount (Rs)||IUC Minutes (non-Jio mobiles)||Free Data Entitlement (GB)|
This decision of Reliance Jio to charge its customers per call comes after a consultation paper was proposed by the TRAI to extend the deadline to zero IUC charges with effect from 1st January 2020 citing traffic asymmetry.
“The consultation paper did create regulatory confusion in this context and therefore Jio was forced, most reluctantly and ultimately, to recover this regulatory fee of 6 paise per minute for all off-net mobile voice calls as long as there are IUC charges,” the company said in a statement.
“Therefore, for all Jio customers recharges starting today, calls made to other mobile operators will be billed at the prevailing IUC level of 6 paise per minute via IUC top-up vouchers until such time as TRAI transitions to a zero termination fee regime.”
Watching the current scenario, customers need to realise that the era of freebies and unsustainable call rates is finally drawing to a close, and so, they will have to shell out a little more for mobile phone services. One needs to understand that Jio did not come up with disruptive home broadband plans last month, it was rather a clear indicator that it is keen on ARPU (average revenue per user) growth now and not merely in expanding customer base.