Reliance Jio denies COAI allegations of unfair pricing
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New Delhi: A day after a group of mobile service providers accused Reliance Jio Infocomm Ltd of adopting unfair pricing and providing full-fledged services disguised as trials, the Mukesh Ambani-controlled company denied the charges.
The allegations by Cellular Operators Association of India (COAI) are “malicious, unfounded, ill-informed, and frivolous and are contrary to actual facts,” Reliance Jio wrote in a letter to J.S. Deepak, secretary, department of telecommunications (DoT). “The said letter from COAI prima facie appears to be an exercise with the ulterior motive of promoting the vested interests of the incumbent dominant operators,” it said.
COAI had asked the telecom department to intervene and stop Reliance Jio from offering free services as trials and accused the Telecom Regulatory Authority of India (Trai) of being biased towards Jio. It also accused Reliance Jio of not intimating tariffs to Trai, collecting customer acquisition forms, porting subscribers from other operators in its test phase, flooding traffic on other mobile networks and manipulating interconnection utility charges (IUC).
Reliance Jio said it was offering VoLTE (voice over long term evolution) on a large scale, requiring trials to certify devices that can work on its network. Tests are also conducted to check network conditions under heavy traffic and estimate optimal network parameters, it said.
Mahesh Uppal, director at consultancy firm ComFirst, did not agree with the COAI’s contention that Reliance is competing unfairly, calling it an ambivalent charge.
“Reliance Jio is a formidable, ambitious player which at the moment is a new entrant and is faced with advantages of incumbency enjoyed by current GSM players,” he said.
Reliance Jio said it has followed all regulations and compliances. “RJIL has duly informed the need and process relating to the test trials to DoT and Trai from time to time. RJIL has, vide its letter of December 22, 2015 (along with a copy to TRAI on the same date) informed of the commencement of test trial using employees and families of RJIL, its affiliates, consultants and service providers, and buyers of such LTE devices, which were tested and certified on RJIL network. A copy of the said letter was given to all the TERM (telecom enforcement resource monitoring) cells as well.” The company claimed informing DoT about the test trials on 4 May 2016 and following procedures of verification of customer acquisition forms with proofs of address and identify.
The company stated the provisions of a unified licence and reiterated that the trials were conducted within its scope and terms.
In a reply to the COAI charge of increasing traffic burden and point of interconnections (POIs) with other operators, Reliance Jio said it expects 50 million subscribers to be joining it in the first quarter of its launch and “In order to help provide seamless connectivity to the targeted subscribers, RJIL will require sufficient interconnect capacity for inter-operator traffic at the POIs.”
On manipulating IUC charges, Reliance Jio stated the leading three mobile operators are opposing downward revision of IUC charges. “Any reduction in IUC is not a benefit for the new entrant operator, as has been made out in COAl’s letter, and on the contrary, it enables the new entrant operator to effectively compete in the market place.”
However, on the IUC issue, Uppal added, “The incumbents are right to argue as a radical cut to make IUC zero or reduce it would hurt those (telcos) who have invested in infrastructure.”
IUC charges are charges paid by telecom companies to each other for using other’s network to complete calls and are regulated by Trai.
Trai is expected to review interconnection charges by floating a consultation paper.
The letter accused COAI of acting on behalf of leading telecom operators to make it difficult for new entrants and eliminate competition.
On Wednesday, Rajan S. Mathews, director general of COAI, said, “We have presented our argument and so have they. Now, it is up to DoT and Trai to take matter into consideration and give clarification on this issue.”