Bill and keep: Telecom operators not to pay interconnect usage charge from today

The telecom industry moves to a new regime from Friday with the interconnect usage charge (IUC) becoming zero. This means the operators will no longer have to pay the termination charge of 6 paise per minute to each other.

The new regime, where zero termination rate is payable, is known as bill and keep. A termination charge was paid to the operator on whose network the call terminated by the originating network.

With the new regime kicking in from Friday, Reliance Jio, the only operator which charged its customers for termination of off-net calls (calls made to another network like Bharti Airtel or Vodafone Idea), said it would no longer levy this charge.

While levying a termination charge for off-net calls in October 2019, Jio had said it would abolish it the day IUC becomes zero. The charge was in-built into its tariffs by way of top-up vouchers of different denominations and was pass through in nature.

“As per directions of Trai, bill and keep regime is being implemented in the country from January 1, 2021, thereby ending interconnect usage charges for all domestic voice calls. Honouring its commitment to revert off-net domestic voice-call charges to zero, as soon as IUC charges are abolished, Jio will once again make all off-net domestic voice calls free, starting January 1, 2021. On-net domestic voice calls have always been free on the Jio network,” Jio said in a statement on Thursday.

The development would be revenue-neutral for all operators as largely there’s a symmetry by now between incoming calls to their networks and the outgoing to other networks. Till about a year ago, while there was a symmetry between incoming and outgoing calls between the networks of Bharti Airtel and Vodafone Idea, in case of Jio, the number of outgoing calls was larger than incoming, and therefore, it was a net payer of IUC rather than net receiver.

In October 2019, while announcing it would charge for off-net calls, Jio had said since its launch in September 2016, it had to bear `13,500-crore payment to Bharti Airtel and Vodafone Idea as termination charges.

While reviewing the termination charge in 2019, which it does every two years, the Telecom Regulatory Authority of India (Trai) had retained the regime of payment for another year — January 1, 2020, till December 31, 2020 — and said from January 1, 2021, it would become zero.

Trai had then said it has to keep the interests of 2G/3G subscribers in mind. It had further said traffic imbalance between an only 4G operator (Reliance Jio) and other operators had reduced from the peak of approximately 60 billion minutes per month in December 2017 to 40 billion minutes per month in June 2019. It had earlier expected this imbalance to be corrected by 2020 but since it did not happen the regulator extended the rate by a year.