Reliance Jio at odds with Airtel, Idea, Vodafone over interconnection user charges
New Delhi: Even before the dust settles on the war over promotional offers, another one is brewing between India’s top three telecom firms and new entrant Reliance Jio Infocomm Ltd, this time over call termination charges.
At a workshop held by the Telecom Regulatory Authority of India (Trai) on Tuesday, Reliance Jio officials proposed scrapping of interconnection user charges (IUC), while Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd sought to raise them.
For every mobile phone call, the telecom firm that originates the call pays 14 paise to the one which receives the call, called interconnection user charges. On a net basis, established operators with more users and bigger networks tend to earn more from IUC, while newer and smaller ones find it a burden.
Reliance Jio proposed zero IUC charges, while the other three presented their cost structures to press for a hike in IUC to at least 30 paise, two persons present at the meeting said, requesting anonymity.
Smaller operators maintained that Trai should not change IUC charges.
Jio says its cost of servicing a call is next to zero and hence it proposed a so-called “bill and keep” model, in which companies only keep a record of incoming calls on their network but don’t raise any demand from other operators.
Emails sent to Reliance Jio, Vodafone, Idea and Airtel seeking comments remained unanswered.
The top three telecom firms are of the view that interconnection capacities provided by one telecom firm to another involve costs, for which a company should be fairly compensated. Reducing IUC will dent their revenues, but will also bring down call charges.
“Some operators said reduce the charges, some said increase them, some also requested to maintain it at current levels,” Trai chairman R.S. Sharma said in an interview. He did not reveal any more details.
Trai will hold an open house discussion on the issue on Thursday, before examining the companies’ cost structures to arrive at a decision.
In 2016, the top three telecom firms had claimed that if IUC is cut, it would affect investments in the sector. In 2015, Trai said it would review the termination charges regime in FY18; however, the authority floated a consultation paper in August, suggesting a reduction in the same. The paper has become another issue of contention between Reliance Jio and incumbent telecom operators.