IUC Debate | TRAI’s stance goes against government’s Digital India programme

What does it take for a country to become an advanced economy? The answer isn’t complicated --the government, its policymakers, implementing authorities and the legal system need to be in sync. They need to be aligned at every step – from thought process to agenda setting, to implementation.

Unfortunately that's missing in India.

Let’s take note of a few recent incidents. On October 20, Prime Minister Narendra Modi had discussions with the country’s top technocrats to make use of artificial intelligence in driving human intentions and social welfare. On October 18, Niti Aayog CEO Amitabh Kant said at an investment summit India should adopt the fifth-generation, or 5G, cellular network technology soon.

And just a month before that, Telecom Regulatory Authority of India (TRAI) floated a fresh consultation paper on September 18, 2019 with a view to possibly defer its earlier decision of scrapping IUC (Interconnect Usage Charges) starting January 1, 2020.

At a time when almost every country across the progressive parts of the world are either rolling out, or preparing to roll out, 5G that would offer up to one gigabit per second internet speed, India’s telecom regulator wants to stick to the past.

IUC is the cost paid by one mobile telecom operator to another, when its customers make outgoing mobile calls to the other operator’s customers. These calls between two different networks are known as mobile off-net calls. In modern technology, which is based on internet protocol, voice becomes an application on top of data, which is popularly known as VoIP or voice over IP, which reduces the interconnect cost to an insignificant level. Naturally, IUC becomes redundant.

The problem in India lies in the very fact that incumbent cellular companies still operate on age-old 2G and 3G networks, unlike the relative newcomer Reliance Jio that operates on VoIP.

Continuation of IUC naturally hits Reliance Jio and its consumers. In a statement on 9 October 2019, Reliance Jio Infocomm said that its customers will have to pay 6 paisa per minute if a call is made to a non-Jio mobile network. After the announcement, Jio launched top-up vouchers for IUC tariff which it compensated with additional data .

This IUC was borne by Reliance Jio thus far. In the past three years, the company has spent Rs 13,500 crore on net IUC charges paid to other operators.

The approach to this issue is contradictory to the goals of the government. On one hand, Prime Minister Modi is trying to push Digital India initiatives – in which mobile internet works as the backbone. On the other hand, TRAI is preferring to stick to age-old rules which will have no relevance in the near future. This shows how unstable India’s telecom regulation policy is, which is not good thing for consumers and for advancement of technology. The vision of Digital India programme is to “transform India into a digitally empowered society and knowledge economy”, declaring “digital infrastructure as a utility to every citizen”, which Reliance Jio has highlighted in its letter to TRAI last week.

About 400 million of India’s 1.1 billion mobile users have 2G connections. These 400 million mobile users are deprived of most of the government utilities and services meant for every citizen under the Digital India programme, 'ease of living' initiatives and 'fourth industrial revolution'.

Incumbent cellular operators want to leverage the network they built years ago, despite mobile connectivity in India being at a poor state these days. The incumbent players are not upgrading their networks as much as required, or investing in building the next-generation networks for cellular telephony.

If the regulator goes back on its promises on the IUC front, and leaves room for incumbent players to delay upgradation of infrastructure, the government's dream of a Digital India makeover may not progress much.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.