Airtel, Vodafone, Idea’s Demand For Minimum Call Rate Dismissed By TRAI; Asks Them Not To Make ‘Noise’ Over IUC

Telecom Regulatory of India (TRAI) has outrightly rejected the demand for minimum call rate, as demanded by Airtel, Idea and Vodafone, after Jio devastated their market, and forced them to incur huge losses.

Describing such demands as ‘too much noise’, TRAI Chairman RS Sharma has said in principles of a free market, there should not be any Govt. enforced price slab for call rates.

Sharma said, “There is too much of noise saying that the regulator must fix the minimum price. I don’t think that’s really a correct thing to do for a regulator. The price is under forbearance; both the top and bottom should be under forbearance.”

Turning into an advocate for end-users, Sharma has said that if telecom operators can raise their tariff as and when they feel, then they should be ready to accept the same from other telecom players as well (read Jio).

He said, “It cannot be that for customers you can raise as much as you want, but you can’t take it below a certain threshold..”

What Airtel, Idea & Vodafone Is Demanding?

As per their demand, Interconnect usage charge or IUC should be declared as the minimum price of a voice call. IUC is what the caller’s operator pay to the receiving caller’s operator for every call.

Right now, 14 paisa is the IUC. This means, that whenever a Jio customer calls Airtel customer, then 14 paisa needs to be paid by Jio to Airtel. Now, as Jio has made all calls free of charge, other operators have also launched similar plans, which is causing them extreme losses.

By making IUC as the minimum call rate, Jio’s competitors are aiming to protect their losses, and also create a market wherein no telecom operator can provide free calls, like what Jio is doing.

TRAI Supports Free Market Fundamentals

But Jio has made a promise of offering free lifetime voice calls, and this has disrupted the entire market.

While Jio has made a business model out of data usage charges, as evident by their recent plans, other operators are still relying on voice-based revenues, which they want to protect.

Sharma said, “In the long run, there should be a minimalistic intervention and regulation.”, thereby signalling that there is no way Govt. will control the free market model. Hence, if Jio is ready to pay IUC, and still charge nothing from customers, it cannot be stopped.

Supporting free market fundamentals, Sharma said, “The telecom industry is very mature, vibrant, competitive, which is a good thing. I trust the wisdom of the players in this space, they’re mature enough to realise what is in their long-term interest..”

In the coming months, TRAI will hold public meetings, and public consultation to derive at a conclusion, regarding the IUC controversy.

We will keep you updated.