Interconnect usage charge row: Why Jio is charging 6 paise per minute for calls to other networks

Billionaire Mukesh Ambani's Reliance Jio on Wednesday said it will charge 6 paise per minute for voice calls made by its users to mobile phones networks of rivals like Airtel and Vodafone-Idea after indications that call connect charge may not end by the previously mooted deadline of December 31.

While Jio blamed regulatory uncertainty caused by regulator TRAI reopening the issue of sunset clause for the so-called interconnect user charge (IUC), some in the industry saw it as a U-turn by the company on its promise to give users life-long free calls. Jio, in a statement, said the charge would last till such time that regulations require payments to rival networks for completing calls but added that it will compensate the users by giving free data of equivalent amount.

Jio, which charges users on its 4G telecom network only for data usage, whereas voice calls to anywhere in the country are free, said the new charge would not be applicable on calls made by its users to other Jio phones and to landline phones as well as on calls made using WhatsApp, FaceTime, and other such platforms. Incoming calls from all networks will continue to be free.

If you didn't understand that, here's a simple explanation:

If you have a Jio number and you call someone using an Airtel or Vodafone-Idea number, you will be charged 6 paise per minute till the time you keep ringing. The calls will still be free to all other operator but you will have to pay 6 paise per minute till the time you ringing the other person.

However, if you are making a call to a Jio number or a landline number, then you don't have to pay anything. Also, all incoming calls, as well as WhatsApp calls, will stay unaffected from this. The IUC charge will also be applicable to postpaid users and it will be added to their billing cycle.

Which kind of calls will be exempt from the 6 paise per minute charge?

a) all Jio to Jio calls;

(b) all incoming calls;

(c) Jio to landline calls; and

(d) calls made using WhatsApp or FaceTime and similar platforms.

Why is Jio doing this?

Jio wants the TRAI to go for zero IUC charge and that seems to be happening by early 2020. While other operators charge their customers for calls, Jio offers free calls on its network and hence, it has to bear losses as Jio pays the IUC charge for every call made to another network.

"The amendment to the IUC Regulations in 2017 was after considerable deliberations and consultations. In this background the consultation paper has created Regulatory uncertainty and therefore Jio has been compelled, most reluctantly and unavoidably, to recover this regulatory charge of 6 paise per minute for all off-net mobile voice calls so long as IUC charges exist," says Jio.

When will the IUC charges end for Jio customers?

"Jio again assures its 35 crore customers that the 6 paise per minute charge on outgoing off-net mobile calls shall continue only till the time TRAI abolishes IUC, in line with its present regulation," says Jio.

What is IUC?

IUC or Interconnect Usage Charge is the amount a telecom operator has to pay to the other telecom operator if a customer makes an outgoing call to a customer of the other telecom operator. The TRAI decides the IUC charge and currently, all operators have to pay 6 paise per minute.

What is TRAI’s stand on IUC?

Telecom regulator TRAI in 2017 had slashed IUC to 6 paise per minute from 14 paise and had proposed to end the regime on December 31, 2019, after considering various factors. But it has now floated a consultation paper to review whether the timeline needs to be extended.

In its affidavit in the supreme Court as back as October 2011, the TRAI had said “there should be progressive reduction in termination charges finally converging to zero termination charge … at the end of 2 years from the present.”

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