Vodafone calls Trai move to cut IUC 'retrograde'

NEW DELHI: UK based Vodafone Group's India arm termed as "retrograde" a move by the telecom regulator to cut interconnect usage charge (IUC) to 6 paise a minute from 14 paise, from October 1?, and said it will benefit only the new entrant, Reliance Jio.

In a statement, a Vodafone India spokesperson said that the telco was considering its options on responding to the move from the telecom regulator which has come in Tuesday evening, amid financial stress being faced by telcos.

"We are disappointed with this decision and are now considering our options in response to it," the company said.

"This is yet another retrograde regulatory measure that will significantly benefit the new entrant alone while adversely affecting the rest of the industry as a whole. Unless mitigated, this decision will have serious consequences for investment in rural coverage, undermining the Government's vision of Digital India," it added.

Late Tuesday, the Telecom Regulatory Authority of India lowered the IUC, paid by the mobile operator originating a call to the network where it is received, to 6 paise a minute effective October 1 and decided to scrap the charge from January 1, 2020, by moving to a bill and keep regime.

The debate over the charge was revived in August last year, when Trai issued a consultation paper proposing to review it. Reliance Jio, the latest entrant in the telecom market, wanted the charge to be lowered and the existing calling-party-pays regime eventually scrapped. Established companies including Airtel, Idea and Vodafone wanted the IUC to be increased to help recover their investments in acquiring spectrum and building networks.

The Cellular Operators Association of India said Tuesday evening that it's members including Bharti Airtel, Vodafone India and Idea Cellular, were set to move court against the Trai regulation.