Reliance Jio's decision to start IUC recovery is not an unusual move, said Rajan S Mathews, director general of Cellular Operators Association of India (COAI), after the telecom company announced that it will charge 6 paise per minute for mobile voice calls to other operators.
Jio's decision comes even as uncertainty looms large on moving to a zero interconnect usage charge (IUC) regime in 2020.
“Jio expects that perhaps the interconnect charge at 6 paise at present will be pushed out further for some period in time and because the balance of trade between the companies is not equal, they would expect some outflow of revenue," said Mathews in an interview with CNBC-TV18.
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“They (Jio) are trying to cover that expense by 6 paise which is the amount of the present interconnect. So this is not an unusual move, all companies will try to recover their cost and cover their cost. Therefore, this is not an unexpected issue when companies are faced with this type of situation,” he added.
Mathews said that the IUC charge is not related to tariffs as "tariffs in the market place are driven by different dynamics".
Speaking about IUC abolition, Mathews said, “TRAI has indicated that it is only reviewing a pushback from January 1st. So we will have to wait to see based on the inputs that the regulator receives."
Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes CNBCTV18.com.