TRAI Postpones Abolition of Interconnection Fees by One Year

India phone user gender gap

Following persistent protests from Airtel and Vodafone Idea, the Telecom Regulatory Authority of India (TRAI) has decided to defer its plan to abolish the controversial Interconnection Usage Charge (IUC) that operators pay each other for calls made from one network to another. The zero-IUC regime, which was to go into effect from January 1st, will be put on hold for one more year, TRAI said in an official announcement on Tuesday.

The decision means that carriers will have to continue paying IUC charges of 6 paise per minute for calls from their network to those of their rivals. The fee, which was originally instituted to help incumbent operators recover their investments in the face of predatory pricing from new entrants, was bought down from 14 paise a minute a few years ago to just 6 paise earlier this year, and was to be abolished in entirety from next month.

However, the postponement was expected after TRAI floated a consultation paper in September to seek stakeholders’ view on the matter, signalling that the regulator was having a rethink about its plans to further bring down costs in the face of stiff opposition from the telecom industry lobby, COAI (Cellular Operators Association of India).

Having succeeded in forcing TRAI to roll back its plans, the COAI took an expected victory lap, claiming to have been vindicated by the decision. “COAI has always maintained that in a CPP (Calling Party Pays) format that we follow in India, there should always be cost based IUC (interconnector usage charge) in line with global practice”, the organization said in an official statement.

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