Bombay HC refuses to stay TRAI’s reduction of interconnection usage charge

Idea Cellular and Bharti Airtel had challenged decision, saying they would incur huge losses due to the new interconnect charges.

people on phone with tower.new delhi,08/08/2010.photo: (pradeep gaur/mint)

The Bombay High Court last week refused to stay the Telecom Regulatory Authority of India's (TRAI) September 19 decision to reduce interconnection usage charge (IUC) from 14 to six paise with effect from October 1, and to abolish it altogether for local calls from January 1, 2020.

The IUC is the amount paid by one telecom operator to another when a call from its network is made into the other operator's network.

It is believed that the TRAI decision will likely benefit newcomers such as Reliance Jio in the telecom sector.

The division bench of Justice Naresh Patil and Justice ZA Haq said that in financial and policy matters, courts should not pass interim orders as a matter of routine. "It is a settled principle of law that in such cases, the court should be extremely cautious in passing any interim order," the bench said, refusing to stay the TRAI's decision.

Idea Cellular and Bharti Airtel had filed separate petitions challenging the TRAI decision, and their petitions were taken up for urgent hearing on September 29.

On behalf of Idea Cellular, it was argued that the TRAI had no authority to amend Schedule I of the Telecommunication Interconnection Usage Charges Regulation 2003, and that it was for the central government to amend the regulation in accordance with its prevailing policy.

Expressing apprehension that it would suffer a loss of more than ₹700 crore annually if the decision was implemented, Idea Cellular's senior advocate Darius Khambatta sought a stay on the implementation of the decision. Under the conditions of the licence granted by the Department of Telecommunications, he said, they are allowed to use the technology of their choice, but the TRAI decision imposes upon them one particular technology - VoLTE, which is currently used by only one operator, Reliance Jio. This technology allows calls to be made using 4G data.

Khambatta submitted that the decision was not only without jurisdiction, but contrary to the prevailing policy and detrimental to the interests of the consumers. According to him, currently, less than five per cent of the voice traffic is being served by the new technology, while the remaining 95 per cent voice traffic is based on old technology involving 2G, 3G and 4G technologies.

Senior advocate Rafiq Dada, who represented TRAI, argued that there was no reason to urgently take up the hearing and seek a stay on implementation of the TRAI decision. He said that telecom companies would not start paying interconnection charges at new rates immediately from October 1, though the rate is effective from October 1. actual payments will be made only in the second or third week of November, and in between the petitioner companies will not suffer financial loss because of the decision, Dada said.