Revenues of Indian telecom companies could decline further in FY18, as the Telecom Regulatory Authority of India (TRAI) looks set to announce the new interconnect usage charges in 3–6 months.
Interconnect charges are those that telcos pay to other operators for calls terminating on their networks. Currently, interconnect charges are at
14 p/minute and the regulator has proposed to bring this down to zero eventually. TRAI conveyed that IUC would reduce gradually and new revised rates would be announced in the coming months. IUC accounts for almost 25,000 crore to revenues of telecom operators with a lion's share being cornered by the three large operators.
TRAI had issued a consultation paper last year on interconnection usage charges (IUC) with a view to lower the same from FY18. The regulator has proposed phasing out this charge gradually as operators migrate to IP-based networks. The regulator indicated that over the long term, IUC should decline to zero. The issue of call drops too has been more or less resolved, following spectrum reframing and network reorganization. On net neutrality, the regulator's view is to curtail operators from offering discriminatory pricing.