Airtel, Idea fail to gain stay on IUC cut
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India’s Bharti Airtel and Idea Cellular have failed to secure a court injunction on a recent regulatory decision to slash and eventually abolish the interconnection usage charge (IUC).
The two operators petitioned the Bombay High Court seeking an order to halt the implementation of
regulator Trai’s order to reduce the IUC to 6 paise ($0.001) per minute from the current 14 paise.
But the court declined to grant the stay before the cut took effect yesterday. The court has nevertheless agreed to hear the operators’ arguments against the cut next month.
Trai revealed last month that the IUC will be cut starting this month, and will be abolished altogether from the start of 2020.
The move has the potential to cost incumbent operators up to a combined 50 billion rupees ($765.5 million) in revenue annually, and to benefit newcomer Reliance Jio by the same amount, although Jio has denied that it stands to gain from the decision.
Questions & Answers
Q.What is the new interconnection usage charge per minute?
What is the new interconnection usage charge per minute?
The regulatory decision is to reduce the interconnection usage charge (IUC) to 6 paise per minute. This is a reduction from the previous rate of 14 paise per minute.
Q.When will the interconnection usage charge be completely removed?
When will the interconnection usage charge be completely removed?
The regulator Trai plans to abolish the interconnection usage charge entirely from the start of 2020. The current reduction took effect yesterday.
Q.Which operators are expected to lose revenue due to this change?
Which operators are expected to lose revenue due to this change?
Incumbent operators Bharti Airtel and Idea Cellular are expected to lose significant revenue. This move could cost them up to 50 billion rupees annually.
Q.How much revenue could the change cost the incumbent operators annually?
How much revenue could the change cost the incumbent operators annually?
The change has the potential to cost incumbent operators up to a combined 50 billion rupees ($765.5 million) in revenue annually. This amount is also expected to benefit Reliance Jio.
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