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Jio says IUC is a subsidy to benefit only incumbent telecom operators

21 September 2017

Reliance Jio has denied that it would derive any benefit from the Trai move to reduce interconnection user charge (IUC) stating Jio continues to be a zero call rate service and it only benefits incumbent telecom service providers with extra revenues.

According to Jio, the incumbent operators have been opposing all the IUC regulations over the past 8 years, only to thwart the passing of benefits to customers.

They have been defending IUC saying it is needed to promote rural coverage, which clearly shows that the incumbent operators have been treating IUC as a subsidy that the Indian customers must pay to sustain these operators financially, Jio pointed out.

On the contrary, the high cost IUC regime has debilitated smaller telecom operators, many of whom have already left the scene because of the financial stress.

Jio said it is a delayed move by the regulator as a Trai report submitted to the Supreme Court in 2011 had envisaged the implementation of a Bill and Keep (B&K) regime as far back as in 2014, in order to make mobile call rates affordable to the ordinary Indian consumer.

Bill and keep (B&K or BAK), also known as net payment zero (NPZ), is a pricing arrangement for the interconnection (direct or indirect) of two telecommunication networks under which the reciprocal call termination charge is zero.

Jio said it has always offered free voice services to its customers. There is no question of any advantage from the new IUC regulation to Jio as it has already passed on all the benefits to customers.

Also,Jio pointed out that at a time when the world is moving towards IP-based technologies, cost of voice has come down to a fraction of a paisa and the customers should enjoy this advantage.

Meanwhile, the Delhi High Court on Wednesday dismissed the petition of one of the incumbent operators while pronouncing that the appeal failed to show any violation of Section 11 (4) of the Trai Act, 1997 (principles of transparency).

Reliance Jio said the incumbent operators have gone ahead with their petitions based on untrue and baseless allegations against the process for determination of IUC or the regulator.

''Technology is fast determining growth opportunities in the world. It is the responsibility of all the operators and other stakeholders to work together to achieve the vision of Digital India and transform the digital landscape of India. A forward-looking regulatory regime will contribute in achieving that vision,'' it added.

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