As TRAI reducd the IUC Charges by 33% from 30 paise to 20 paise, here is the base case impact on all the Indian wireless operators.
To illustrate, take the case of a pre-paid GSM subscriber generating an ARPU of Rs 190 per month, with monthly minutes of usage (MoU) of 450 minutes, incoming-outgoing ratio of 55:45 and 40-50 per cent of incoming calls being received from subscribers outside the home network (off-net calls), would come down by Rs 8-10, assuming the full reduction in charges being passed on to subscribers.
This reduction in ARPU would marginally hurt the business of established service providers, it is a positive move for new entrants in the market and players in the process of rolling out GSM networks. This is because their interconnection charges would be high owing to the low amount of intra-network traffic (on-net calls) generated while they are in the process of ramping up their subscriber base.