TRAI slashes IUC on voice calls: Phone bills to down; Jio gains, Airtel loses

New Delhi: The telecom regulator on Tuesday slashed termination charge on mobile voice calls to 6 paise a minute, from the current 14 paise per minute which would reduce cost of such calls.

The termination charge is paid by the telecom operator from where the call is being made to the telecom operator on whose network the call is being received.

This means if an Airtel customer calls a Vodafone subscriber, then Airtel will have to pay termination charge to Vodafone.

Telecom Regulatory Authority of India (Trai) said that the termination charge will be completely eliminated from January 1, 2020.

The move comes as a major win for Reliance Jio which wanted IUC to be slashed to zero. It is a negative for incumbent operators like Bharti Airtel and Vodafone because being bigger operators, a large chunk of calls will be terminating on the networks of Bharti Airtel and Vodafone. The incumbent operators may challenge the order in a court.

Experts pegged the benefit to Jio from this decision at Rs 5,000 crore annually. It may also lead to a loss of Rs 2,000 crore to Airtel, Rs 1,500 crore to Vodafone and Rs 1,200 crore to Idea, the experts said.

Reliance Communications and Aircel (merged entity) could see a benefit of '250 crore annually from the move. These loss or gain estimates are not official figures.

Trai said it is of the view that termination charges work as disincentive to the deployment of new technologies such as VoLTE and migration to IP networks by operators.