Telcos agree to consider Reliance Jio demands after Trai meeting
New Delhi: At the end of a day of high drama, telecom operators struck a conciliatory note in their battle with Reliance Jio Infocomm Ltd on Friday by agreeing to consider the new entrant’s demand for additional points of interconnection.
The head of the Cellular Operators Association of India (COAI), the industry lobby group, was asked to leave a meeting called on Friday by the telecom regulator, illustrating the depth of the acrimony the interconnection issue has aroused.
COAI director general Rajan S. Mathews was asked to leave because he hadn’t been invited to the meeting in the first place, said a person present at the meeting. Mathews then got into an argument with Telecom Regulatory Authority of India (Trai) officials, whom he accused of acting at the behest of Jio, although he eventually complied, the person said on condition of anonymity.
“COAI has been kept out of the Trai meeting at the insistence of Jio, and Trai acquiesced to their demand in an unprecedented manner,” Mathews said in a statement later.
Jio is also a part of the lobby group, together with established telecom companies Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd, but the Mukesh Ambani-led company has accused the group of maligning and damaging its interest in favour of its older rivals.
COAI, on its part, has accused the telecom regulator of furthering the interests of Jio.
Points of interconnection, which enable two operators to connect to each other’s networks, have been a contentious issue.
“Incumbent operators have advantages over new entrants, they have well-established networks, customers. New entrants require fair access to both. Therefore, the onus is rightly on the incumbent operators not to misuse their market power by creating unfair hurdles,” Jio boss Ambani said on 1 September.
In one week, Jio customers faced 50 million call failures in connecting to customers on competing networks, he said. That was when the Jio network was still in its test phase.
“This is a fight for justice, a fight for customers. Not just Reliance Jio customers or Airtel or Vodafone, but all Indian customers,” Jio board member Mahendra Nahata told PTI.
“We have asked for the right number of connections, the right quantum of interconnections. We have put forth our point of view to Trai. It is for Trai to look into the matter. There is no time frame indicated by Trai,” he added.
On Friday evening, COAI said the telcos will consider providing “reasonable incremental capacity” to Jio.
If they arrive at an agreement, it will take at least 90 days to fulfil Jio’s demand for more interconnection points.
“Usually, the regulations kick in once the commercial service is announced and (has) begun,” Mathews said at a media briefing. “During the test phase, there is ambiguity and usually there is minimal service in test phase. So we understand that Reliance confirmed that 5 September was the launch date, so now from this date incumbent players have to comply with providing POIs (points of interconnection) within 90 days as per the agreement.”
“Prior to this date, they were in trial and there is no regulation that requires incumbents to comply with demand in trial period,” he added.
The telcos had earlier said Jio’s testing phase was of a scale that matched a full-fledged network launch.
On 1 September, Ambani announced audaciously low tariffs, low-cost phones and free voice calls for a lifetime to Jio subscribers, signalling a new phase of turbulence in India’s telecom industry.
To Friday’s meeting, Trai invited Airtel, Idea Cellular and Vodafone India to discuss the ongoing dispute around telcos not heeding Jio’s request for additional points of interconnection.
“It is definitely progress...this is certainly breaking of the initial deadlock...expectations have been set and we hope this will set the basis of a resolution,” Mathews said about the agreement among the telcos to consider Jio’s request.
Interestingly, Airtel raked up another contentious issue—of interconnection usage charges (IUCs)—in a statement released shortly after COAI’s press conference. It urged the authorities to curb the “asymmetric” traffic Jio is generating as a result of free services.
“We urge Trai to find a way to curb the massive asymmetric traffic to ensure that receiving networks are not abused by a tsunami of free traffic. In this regard, IUC is an effective tool in the hands of Trai, which we hope they will use judiciously,” it said in a statement.
Airtel said that after Jio’s welcome offer to subscribers expires on 1 January and mobile traffic stabilizes, points of interconnection will not be a big issue. In the meantime, it agreed to augment the points of interconnection already provided to Reliance Jio.
“In the interim, we continue with our efforts to augment the hundreds of PoIs already given to Reliance Jio, as per the bilateral agreement, so that customers are not inconvenienced,” Airtel said in the statement.
Reliance Jio has said its services are free till 31 December, following which consumers will be charged as per tariff plans that were unveiled on 1 September.
“None of the new operators who have launched services in the last few years have faced any POI-related issues with Airtel,” said the Airtel statement.
According to Mahesh Uppal, a director at ComFirst consultancy, Trai can reconcile the concerns raised by both the parties.
“The issues are not unfamiliar elsewhere. The regulator must use its jurisdiction to resolve the issue based on international best practices,” he said.
COAI has been arguing that the points of interconnection provided by incumbents to Jio are sufficient to support 15-20 million customers while the company has no more than two-three million customers right now. Jio is targeting the acquisition of 100 million customers in the shortest possible time.