In an unprecedented move, Reliance Jio has decided to recover IUC of Re 0.06 per minute from its users. This means, it is now charging users for making voice calls to other telco networks, reneging on its promise of a lifetime of free voice calls.
The move follows TRAI’s consultation paper, seeking stakeholder views on reviewing the timeline for abolishing IUC/termination charges. In 2017, TRAI had reduced the IUC from Re 0.14 per minute to Re 0.06 and proposed a complete elimination from January 2020 onwards. However, reconsideration of this timeline has become important since millions of subscribers have still not moved to the VoLTE network, which would have lowered the cost of generating a call, rendering IUC redundant. The regulator has also stated that traffic asymmetry continues to exist among telcos.
The high rate of IUC harms telcos with more outgoing traffic than incoming calls. As of end-June 2019, 64 per cent of Jio’s total traffic was outgoing. The company paid Rs 7.2 billion as net IUC to other operators during the quarter ended June 2019. It has paid almost Rs 135 billion as net IUC since its launch.
Not surprisingly, Jio is unhappy with this change in TRAI’s stance. It has stated that it will continue to charge its users until TRAI brings the IUC down to zero. It will, however, compensate them by giving additional data. Also, calls from Jio to Jio and to landlines, and those made over apps such as WhatsApp will remain free.
As of now, Airtel and Vodafone Idea have not announced any plans to follow suit. The two telcos have considerably lower outgoing calls from their network and in a way, stand to gain if IUC continues. Moreover, both the incumbents have stated that IUC is more of a bilateral arrangement between telcos and thus should not be linked to tariffs.
That said, industry analysts believe that if the incumbents continue to charge for voice calls, this may do some good to the beleaguered telecom sector. ARPUs and tariffs could finally start looking up after remaining at unsustainable levels for a prolonged period.
TRAI is yet to comment on the situation. It would be interesting to see how the scenario unfolds in the coming weeks, whether it will bring an end to the era of free voice calls in India, or will just be a temporary measure.
