“COAI has asked TRAI to take actual network-related costs incurred by telcos into consideration to compute the interconnect charges”
Cellular Operators Association of India (COAI) has asked Telecom Regulatory Authority of India (TRAI) to hold the review of interconnect usage charges (IUC), which are paid by one operator to another for connecting calls, till March 2017. COAI is referring the request to TRAI’s recently submitted paper considering removal of interconnect charges for VoLTE calls. The operators association said that more clarity is needed on “several issues” before a review of the interconnect usage charges policy can be processed.
As of now, there is 14p/minute of interconnect usage charges that telecom operators pay to each other for connecting calls. Last year, it was 20p/minute, but was reduced to 14p/minute in February 2015. It makes up for a huge amount of revenue generated by the telecom operators. The proposed TRAI regulations will favour the newly launched telecom operator Reliance Jio, which offers both its calling and data services exclusively on the VoLTE network. COAI has asked the regulator to hold the review of the IUC policy for some months, and to first clarify the existing problems.
COAI and incumbent telecom operators like Airtel, Vodafone, and Idea have also appealed to the regulator to also take actual network-related costs incurred by telcos into consideration to compute the interconnect charges. This refers to computing the IUC by taking several things into account including overheads, spectrum costs, capital costs and operating costs. That said, Reliance Jio has a different view and says that “Bill and Keep” approach should be adopted to determine these charges. TRAI had fixed October 17th as deadline for receiving industry comments regarding the review of IUC policy.
Thanks to the Welcome Offer, Reliance Jio recently claimed to have enrolled as many as 16 million subscribers in just 26 days after the launch. The free calls under the welcome offer have resulted in heavy losses for the rival telcos. Jio has seen as many as 120 million calls originating from its network to the incumbent operators fail every day. Jio recently asked the other telcos, once again, to provide sufficient interconnection points to handle calls from its network. TRAI had also set October 17th as the deadline for the incumbent operators to resolve these issues and meet the standard 0.5 calls drops allowed on any network.
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