IUC - Interconnect Usage Charges is charges paid to carriers on whose networks calls are received. Eliminating IUC will will impact
Airtel / Vodafone / Idea [A-Vo-Id Operators ] as they are net interconnect (IC) gainers and positively benefit smaller telcos and new entrant Jio (net payers).
The last reduction was in Mar-15 with the IUC reduced by 30% to Rs 0.14 from Rs 0.20 after 6 years. In last 11 years termination charge was reduced only twice, although regulation mentions that review could be every 2 years. The argument for reducing IC rate is costs on IP calls would be lower and argument for not reducing is spectrum costs have increased since last revision.
We see a low likely hood of IC rates completely removed as currently market shares are in-balanced between telcos and currently there is asymmetric structure in terms of incoming and outgoing payments.
