Idea Cellular has asked Telecom Regulatory Authority of India (TRAI) to recall its Interconnect Usage Charge (IUC) announcement with regards to Mobile Termination Charge (MTC) in toto.
The proposed reduction by TRAI is a body blow to all operators who depend upon fair, equitable, and transparent regulation to encourage and sustain reinvestment in the sector says Idea Cellular spokesperson.
The Authority’s verdict to cut IUC to a paltry 6 paisa per minute, determined on the basis of a new cost methodology (Pure LRIC model) which brazenly ignores the stupendously high prices paid for the spectrum, – a key raw material without which mobile telephony services cannot be delivered – compromises this principle, and will negatively impact the already stressed financial health of the sector added Idea Cellular spokesperson.
With the drastic reduction in the prevailing IUC, and the proposed migration to a BAK (Bill And Keep) regime from 2020, the mobile telecom sector may very well be further exposed to the claws of predatory and anti-competitive pricing tactics, disturbing the long term competition structure of the industry to a near monopoly commented Idea Cellular spokesperson.
All voice traffic in India is terminated on two types of networks – TDM based networks using 2G/3G/4G (non-VoLTE) technology, currently terminating over 95% of voice traffic, and VoLTE based 4G voice networks, currently terminating less than 5% of voice traffic. A set of simple and elegant solutions to determine IUC based on costs of termination on these two types of networks were submitted as recently as last week, but have elicited no response.