Sunil Mittal takes up IUC issue with Trai

Alain Brian
Juillet 25, 2017

Bharti Airtel Chairman Sunil Mittal has urged the Indian telecom regulator to reject the "Bill and Keep" (BAK) method and said it should continue with the interconnection usage charge (IUC) regime.

In the current debate, no one has even talked about IUC for global calls settlement.

COAI letter also clarified that Aircel and Reliance Jio have "divergent views" and that they will "represent individually" on the issue. He stated that at present, IUC for a call from India to the U.S. is about 1.2 cents, to Europe about 3-30 cents, to Middle East about 10-14 cents. Neighbouring countries like Bangladesh, Sri Lanka and Nepal charge about 2-13 cents.

An interconnect usage charge (IUC) is paid by one telecom operator to another operator for terminating the incoming call from their network. "The TRAI is not even debating this issue, therefore, confirms the Authority's acceptance of the principle that IUC is indeed a settled global practice built on fair and equitable settlements for work done by each operator for carrying each other's calls". "Why should India be any different? Bill and keep regime should be rejected", Mittal said in a letter to Trai chairman R S Sharma.

Mukesh Ambani-controlled Reliance Jio Infocomm Ltd is pressing for the bill-and-keep model, wherein IUC (paid by the telco from which a call originates to the telco which receives the call) will be effectively scrapped. Mittal also said customers enjoying free calls was testimony that the IUC regime was not coming in the way of affordable tariffs. Under the "Bill and Keep" or BAK regime, the operators only keep record of incoming calls on their network but don't raise any demand from other operators.

In a presentation to Trai last Tuesday, Reliance Jio claimed India's top three telcos have generated as much as Rs1.04 trillion in revenue in the past five years on account of non-implementation of a 2011 Trai road map to cut the charges to zero.

Mittal, in his letter, said that IUC has ensured investments in networks continued.He said that the current IUC at 14 paise is already well below cost and "it will be in the fitness of things that while taking a final decision, the Authority upholds the principle of compensation of work done by each operator and the IUC is sat costs discovered through a fair and transparent mechanism". "It is, therefore, not a surprise that the advanced countries, whether in North America or Europe, and for that matter Japan, South East Asia and the emerging markets of India, Bangladesh, Sri Lanka and all of Africa and Latin America operate under a fair IUC regime", Mittal added.

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