COAI Says Cut in Termination Charges 'Disastrous', Incumbent Telcos May Move Court

Terming the cut in call termination charges as "disastrous", industry body COAI Tuesday said its members - which include the likes of Bharti Airtel and Vodafone - may move court against regulator TRAI's decision.

Telecom Regulatory Authority of India (TRAI) Tuesday announced slashing of the interconnection usage charge (IUC), paid by an operator for termination of mobile call on a rival network, to 6 paise a minute from the current 14 paise.

The new rate will be applicable from October 1, 2017, and will be completely eliminated from January 1, 2020.

"It was a disastrous move... most of the members had indicated that they would probably move court for redressal in the matter because this type of hit to the financial statements of major operators is clearly not something that they can sustain and that has been made very clear to the regulator," COAI Director General Rajan Mathews said.

Former TRAI Chairman Rahul Khullar agreed with Mathews. "...if you reduce the termination charge, the principal beneficiary is Jio because they are the ones dumping traffic onto other networks. And that is going to be a problem because the amount of revenues involved will be very large and the guys who are existing incumbents are not going to take it sitting down," he said.

Khullar added that the coming days could see a replay of the events in 2007, when the IUC was reduced from 30 paise to 20 paise.

"At that point, IUC was reduced from 30 to 20 (paise) and these guys went to court...so my greatest fear is once again, you are looking at litigation and that is not good for this industry," he said.