Call connect rate cut to help new player only, charge Airtel & Voda

Vodafone, the country's second largest operators in terms of number of subscribers, has termed the Trai's decision as "retrograde regulatory measure".

The incumbent operator in a statement alleged that the move will significantly benefit new entrant alone and would adversely affect the rest of the industry.

Airtel said, "The suggested IUC rate, which has been arrived at in a completely non-transparent fashion, benefits only one operator which enjoys a huge traffic asymmetry in its favour."

Expressing disappointment at the new regulations, Airtel said the industry is facing severe financial stress and the cut in the interconnection usage charges (IUC) will "further worsen" the situation.

The comments come in response to the telecom regulator on Tuesday announcing cut in mobile call connection charges to six paise a minute, and a complete phasing out of these rates from January 1, 2020, a move that will benefit newcomer Reliance Jio and deal a blow to established players.

"As part of an industry, which continues to be a critical driving force behind the economic growth in the country, we are genuinely dismayed by this decision," said Airtel, India's largest telecom operator.

Last night, Vodafone had expressed dismay at TRAI's latest decision and had claimed that the "retrograde" measure, unless mitigated, will have serious consequences for investment in rural coverage and government's vision of Digital India.

Mobile companies currently charge 14 paise a minute for allowing a domestic call from a rival operator to terminate on their network. This charge, called Interconnection Usage Charges or IUC, will be brought down to six paise per minute from October 1, 2017, TRAI has said.

New Delhi: Trai Chairman R S Sharma on Wednesday dismissed charges of non-transparency in its decision to cut call connect rate, saying the cost calculation is objective and scientific and there is no question of "helping or harming" any operator.

Speaking to PTI, Sharma said the IUC charge finalised by Trai was driven by considerations of consumer and industry interest, competition and march of technology.

The Telecom Regulatory Authority of India (Trai) decided on Tuesday to slash the charge paid by an operator for terminating a mobile call on a rival network -- also called the interconnection usage charge (IUC) -- to 6 paise a minute, from the current 14 paise.

The regulator had further said no such charge would apply from January 1, 2020.

Leading telecom operators Bharti Airtel and Vodafone have criticised the regulator's decision on the call connect charge, alleging that the move will benefit only one operator and worsen the financial health of the stressed industry.

Sharma maintained that Trai had gone purely by the cost calculations, backed by data and models and had no discretion in the matter.

"We have no authority to change the costs. Where is the question of helping or harming someone?" Sharma asked.

He said Trai has, in fact, been "conservative" in its approach on setting a 2020 deadline for phasing out the charge.

"In case there are changes in the entire scheme of things and it has to be reviewed, we have right to look at it one year from implementation. We will keep a close watch on developments of new technology," he pointed out. Sharma refused to comment on the possibility of older operators approaching courts on the IUC rate cut, saying in a free country, people have the right to approach legal forums.

"It is a free country and there is democracy. Everyone has right to approach legal forum. I have no comment to offer," he said.

Rejecting allegations by Bharti Airtel and Vodafone that the rate cut favoured one operator in particular, Sharma emphasised that the exercise was only about computation of costs based on the work done by a network.

The detailed methodology on which Trai's calculations are based is part of the explanatory memorandum to the regulations all of which have been placed in the public domain now, he added.

"It is not as if Trai has utilised a discretionary power.

There is detailed computation for public view," Sharma said.