The most interesting war against high Interconnection Usage Charges (IUC) was fought in the UK. In 2009, more than 260 members of parliament (MPs) signed an early day motion (EDM) in the parliament supporting campaign to lower mobile termination rates, making it the 7th largest EDM overall.
EDMs are formal motions submitted for debate in the House of Commons of the British parliament.
There was so much resentment against high IUC that a campaign to lower termination charges was signed by about 150,000 members of public. About 65 consumer groups, charities, and local government organisations supported the move to lower IUC.
When the British regulator Ofcom released consultation paper on mobile termination rates seeking views of stake holders, it received a letter signed by 44 MPs in favour of lowering termination charges.
In the letter the MPs said that the IUCs create an artificial price floor and add to the billions that consumers pay each year to mobile phone companies. “Ensuring that MTRs are set at the cost of making a call (what Ofcom refers to as “pure LRIC” and estimates to be 0.5/minute) will deliver much greater competition, better deals and large savings for customers.”
Copy of British MPs response to Ofcom Consultation paper
The arguments put forward by the British MPs in 2009 are similar to what Indian parliamentarians and consumer groups are saying now.
Lowering IUC benefits consumers
British mobile operator Vodafone that was against lowering IUC in UK is now opposing IUC in India. Its arguments are also similar to what it said to Ofcom in 2009. It warned the British regulator that around four million users would be forced to disconnect their mobile phones, if Ofcom reduced IUC as IUC subsidises low paying mobile users.
Ofcom ignored Vodafone’s warning and slashed MTRs. From 2011 to 2017, the British regulator has reduced MTR by more than 85% and it has been in the benefit of consumers.In India, Vodafone has argued that IUC supports low paying customers in rural areas.
Consumer groups and MPs are demanding that bill and keep (BAK) regime should be followed in India. ITU also recommends BAK and suggests that if its immediate implementation is not possible, then the regulators should implement zero termination charge regime as fast as possible. ITU report ‘4th Generation Regulation: Driving Digital Communications Ahead’ recommends pure long range incremental cost (LRIC) method for determining IUC during interim period.