Home / Industry / Telecom /  Reliance Jio tells Trai Airtel creating smokescreen to hide its ‘ill-gotten’ profits

Reliance Jio tells Trai Airtel creating smokescreen to hide its ‘ill-gotten’ profits

Older telecom firms, including Airtel, Idea Cellular and Vodafone, want interconnection usage charges (IUC) to be raised to at least 30 paise, while Reliance Jio wants it cut to zero. Photo: Indranil Bhoumik/MintPremium
Older telecom firms, including Airtel, Idea Cellular and Vodafone, want interconnection usage charges (IUC) to be raised to at least 30 paise, while Reliance Jio wants it cut to zero. Photo: Indranil Bhoumik/Mint

Reliance Jio, in its letter to Trai, says Airtel is creating a 'smokescreen to hide its ill-gotten profits and to support its false pretence of loss under the existing IUC regime'

New Delhi: In the continuing war of words between Bharti Airtel Ltd and Reliance Jio Infocomm Ltd, the Mukesh Ambani-promoted telecom company has written to Trai saying Airtel is creating a “smokescreen to hide its ill-gotten profits and to support its false pretence of loss under the existing IUC regime".

Reliance Jio was responding to an Airtel letter to the telecom regulator sent last week, which challenged Reliance Jio’s calculations that suggested incumbents generated more than Rs1 trillion through interconnection usage charges (IUC). Airtel on 7 September wrote to the Telecom Regulatory Authority of India (Trai) that saying Reliance Jio was continuously trying to distort facts at various platforms to “show other operators in bad light and create policy bias in its favour".

In the letter, Airtel had said it has not made any gain on account of IUC—as alleged by Reliance Jio—and has instead incurred loss of Rs6,800 crore in the last five years.

“Airtel’s outgoing tariffs for off-net calls clearly shows a premium that it charges from its customers to compensate for the IUC that it would need to pay to other operators. It does not charge the same amount for on-net calls. Therefore, there cannot be any basis for Airtel to show net IUC receipt having already recovered its IUC expense from customers," Reliance Jio said in the letter dated 11 September.

The bone of contention is interconnection usage charges, paid by telecom firm which originates the call, to the one which terminates the call, currently set at 14 paise. Older telecom firms want it to be raised to at least 30 paise, while new entrant Reliance Jio wants it cut to zero. Reliance Jio said in July that India’s top three telecom firms earned Rs1.04 trillion in the past five years by not implementing a 2011 regulatory road map to cut IUC to zero.

An Airtel executive who spoke on condition of anonymity refuted the claims made by Reliance Jio.

“Calculation for the payment of IUC should take into account the difference between off-net incoming and off-net outgoing. The on-net numbers should not even be considered because this is the call that is terminating into my own network," the Airtel executive said.

Reliance Jio has requested Trai to take appropriate action against Airtel “for such mischievous and frivolous submissions made well post the time allocated for additional submissions by the Authority during the open house discussions".

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