Vodafone Idea says Jio’s call on IUC was done in “undue haste”
This came on the back of Jio levying a charge of 6 paise per minute on its subscribers.
“The announcement by one of the telecom service providers today to charge for calls made to other service providers to cover the termination charge of IUC is not only an action of undue haste but it also does not bring out the fact that interconnect is a settlement between operators and not a consumer pricing matter,” said VIL on Wednesday.
This was on the back of Jio levying a charge of 6 paise per minute on its subscribers who want to make outgoing calls to other telcos, in a bid to recover IUC. Bharti Airtel too in a statement said any step to reduce IUC would add to financial burden of the sector.
Interconnect user charges (IUC) is a charge paid to the telco on whose network a call terminates and has been a bone of contention among the private players and the sector regulator. Two years ago, the sector regulator, had brought it down from 14 paise per minute to 6 paise per minute and decided to scrap the charge from Jan 2020. This led to a legal tussle between the regulator and the incumbents since IUC is a revenue generator and any reduction would lead to loss in that net revenue.
The telco, whose chairman is Kumar Mangalam Birla, also alleged that Jio’s decision follows right after it reduced outgoing ring time, which again hurt incumbents.
“This announcement comes closely to the action taken recently to potentially hurt revenues of other operators with its recent unilateral action of reducing ringing time,” said the telco on Wednesday.
Despite protests from rivals, Jio kept its outgoing ring duration to 25 second from an earlier 20 second, forcing Airtel and VIL to bring down their outgoing ring duration from 35-40 seconds to 25 seconds as well.
Vodafone Idea said it does not want to transfer more costs to its consumers, who may not be able to distinguish between on net and off net calls . Jio had said only regular calls to other telcos will be charged and those using platforms like WhatsApp won’t be.
"More than 60% of our consumers have low spends and do not need expensive plans where the commitments are high and so you need to spend large sums of money,” said the telco.
The operator with 320 million subscribers, as per company report, highlighted that Jio’s call on IUC rates were “drawing attention away from the real issue that the industry is in deep financial stress".