Reliance Jio dismisses incumbents' theory that IUC cut will benefit Jio alone

MUMBAI, INDIA: Reliance Jio has dismissed the incumbent operators' theory that the reduced interconnect usage charge (IUC) would benefit the company significantly. On the other hand, Jio has called the cut 'six years too late' saying that it should have been implemented earlier as envisaged in the 2011 report submitted by Telecom Regulatory Authority of India (TRAI) to the Supreme Court.

In a statement Jio said, "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. We deny any benefits to Jio. 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."

TRAI on Tuesday cut the interconnect usage charges (IUC) by more than half to 6-paise per minute with effect from October 1 and abolished it all together for all local calls starting January 1, 2020. “The reduction in the mobile termination charge is likely to yield consumer benefits,” TRAI said in a statement.

The incumbents expressed dissatisfaction with TRAI  slashing IUC rate and said the move will significantly benefit Jio, while adversely affecting the rest of the industry.

Jio has hit back at the incumbents further saying that the incumbent operators made untrue and baseless allegations against the process for determination of IUC or the regulator.

"References to financial stress in the industry or the need for IUC to promote rural coverage again shows the attitude of the incumbent operators wherein IUC is being treated as a subsidy that the Indian customers must pay to sustain these operators financially. On the contrary, it is a fact that the high cost IUC regime thus far has caused financial stress for the smaller and new operators," said Jio.

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," added Jio.