TRAI removes interconnection usage charges (IUC)

The Telecom Regulatory Authority of India (TRAI) has removed the interconnection usage charges (IUC). Earlier, IUC of 20 paise was charged for calls made from landline to landline or landline to mobile.
TRAI also has reduced network IUC on calls made from mobile phones by about 30 percent to 14 paise per call from 20 paise earlier.
The main aim to remove IUC is to boost fixed line phone connections in the country and lower tariffs of calls for the customers.
What are interconnection usage charges (IUC)?

• IUC are the charges that a landline or mobile service provider has to pay to the other service providers for transmitting its customers’ phone calls.
• Generally, an IUC gets added to the price of the call made by customer, which the customer has to pay. Because of addition IUC, call tariffs were high.

Impacts of IUC

• Due to high call tariffs, landline connections in the country had declined in past few years. While, the mobile subscriber base had increased since the mobile incoming calls were made free.
• At the end 2014, mobile subscriber base in the country had reached all-time high at 94.39 crore. While, the landline connections had declined to 2.7 crore subscriber.

Implications of removing IUC

• It will help to boost fixed line phone connections in the country and lower tariffs of calls for the customers.
• Thus in turn promote an investment and adoption of wireline networks which is much needed for the delivery of high-speed Internet in the country to remove digital divide.

Month: Current Affairs - February, 2015