Call Charges to get slashed with revised IUC charges
Telecom regulator TRAI in a major step has revised interconnection usage charges( IUC) for both mobile and fixed charges which will eventually lead to reduction of call charges. IUC is basically the charge which is paid to the network on which the call terminates. In mobile segment the termination charge has been slashed from existing 20p/min to 14p/min and in fixed networks it has been slashed to zero. This move is all set to bring cheers to small operators and fixed line operators as currently mobile segment is dominated by the big three i.e Airtel , Vodafone and Idea with apprx seventry percent market share by revenues which give them upper hand as most call originate and land on their networks. Now it will be interesting to see how much of this advantage is passed on to the customers but it definitely gives an opportunity to telecom PSUs BSNL and MTNL which dominate the fixed line segment to make call rates attractive and compete with mobile tariffs and eventually arrest the surrender rate of landline. The combined market share of BSNL and MTNL in fixed line is apprx seventy five percent and it is gradually declining as mobile penetration has increased manifold and both these companies have little presence in that segment. Although mobile tariffs have been quite low in India but with rising cost of spectrum and network telecom operators are compelled to increase them from time to time but with reduced IUC we may witness renewed competition in voice call rates.
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