On December 31, Reliance Jio announced that it would end IUC (Interconnect Usage Charge) for domestic calls from the beginning of 2021 in line with the Telecom Regulatory Authority of India (TRAI) directions.
Starting January 1, 2021 , a Book and Keep regime would be implemented thus terminating the payment of the IUC.
"As per directions of the Hon’ble Telecom Regulatory Authority of India, Bill and Keep regime is being implemented in the country from 1st January 2021, thereby ending the IUC for all domestic voice calls. Honouring its commitment to revert off-net domestic voice-call charges to zero, as soon as IUC charges are abolished, Jio will once again make all off-net domestic voice calls free, starting 1st January 2021," the company said in a statement.
The IUC has been a bone of contention for Jio. Hence the discontinuation of the same brings cheer for the telecom operator.
A look at the IUC dispute so far and what it means for the customers of Jio.
What is Interconnect Usage Charge?
The IUC is a charge made by one telecom operator to another when its customers make outgoing calls to the other operator. It is a charge paid by the call originating telecom operator to the destination telecom operator. A call between two different networks is known as off-net call.
When was the IUC introduced and what have been the different rates over the years?
The IUC on voice calls was first introduced by TRAI in May 2003. The charges were then fixed at 30 paise per minute. In April 2009, the charges were revised down to 20 paise per minute. Later they were brought down further to 14 paise per minute in February 2015 and eventually to 6 paise per minute in October 2017 before its termination on 31 December, 2020.
What was Jio's contention ?
Jio had sought the termination of the IUC and introduction of the Bill and Keep regime wherein the operators would not demand for the incoming calls into their network and would only keep a record of it.
Jio had demanded so because it has been a net payer of the IUC. It said the Jio users have been making more outgoing calls to the customers of the other telecom operators than receiving calls from their end. Jio claimed that its network receives close to 35 crore off-net missed calls in a day from the users of other networks thus converting the incoming calls into outgoing calls.
So it essentially meant that Reliance Jio had been paying 6 paise per minute to the other operators for all the outgoing calls made by the Jio users.
How did the other telecom operators respond?
Being the net receiver of the IUC, Vodafone Idea and Bharti Airtel demanded the continuation of the IUC regime since under the Bill and Keep regime, the IUC would not be paid to the receiving operator.
How did the IUC regime affect the Jio customers?
Reliance Jio announced that it would charge 6 paise per minute from its customers for the calls made to the rival telecom operators after TRAI deferred the implementation of the zero IUC regime from January 1, 2020, to January 1, 2021.
It also said the IUC will not be applied for the incoming calls, Jio to Jio calls, calls made from Whatsapp and other applications and calls made to landline. The company also announced that it would compensate its users by giving free data of the same value.
How will the IUC termination impact Jio, Vodafone Idea, and Bharti Airtel?
Telecom experts are of the opinion that the discontinuation of the IUC would impact Vodafone Idea the most as it has been the net recipient of the charges. Whereas for Bharti Airtel, the impact is likely to be neutral.
Reliance Jio will stand to benefit the most from the zero IUC regime as it would no longer have to pay the rival operators for the outgoing calls made by the Jio users.
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