NEW DELHI :
India's only profitable telecom operator Reliance Jio has gone back on its three-year-old promise to keep voice calls free and will immediately start charging for outgoing calls made to rival networks — BSNL, MTNL, Airtel, Vodafone and Idea — at 6 paise a minute.
The operator said it “has been compelled, most reluctantly and unavoidably," to do this after the Telecom Regulatory Authority of India’s (Trai) decision to review the date for scrapping interconnect usage charge from 1 January, 2020, has led to regulatory uncertainty.
“For all recharges done by Jio customers starting today, calls made to other mobile operators will be charged at the prevailing IUC rate of 6 paise per minute through IUC top-up vouchers till such time that TRAI moves to zero termination charge regime," Jio said in a statement on Wednesday.
Jio will provide additional data entitlement of equivalent value based on IUC top-up voucher consumption so as to ensure no increase in tariff for customers, the company said.
Interestingly, this comes three weeks after Trai on 18 September floated a fresh consultation paper to see if there is a need to revise the applicable date for scrapping IUC, given the continuing imbalance in inter-operator traffic.
IUC, at present 6 paise a minute, is levied by mobile networks handling incoming calls from rival networks.
Scrapping the IUC or reducing it would benefit an operator with more outgoing traffic than incoming calls. As of June end, 64% of Jio’s total traffic is outgoing. Bharti Airtel and Vodafone Idea would stand to gain if Trai decides to postpone the date of scrapping IUC as these telcos enjoy more incoming traffic than outgoing.
Jio, however, believes that the traffic is asymmetric because rival telcos have kept 2G voice tariffs high.
“The price differential of free voice on Jio network and exorbitantly high tariffs on 2G networks causes the 35-40 crore 2G customers of Airtel and Vodafone-Idea to give missed calls to Jio customers. Jio network receives 25 to 30 crore missed calls on a daily basis," Jio said on Wednesday.
Bharti Airtel, however, without naming Jio, has said that one of its competitors has suggested that Trai has re-opened this issue while the regulator in September 2017 had already said it may undertake an exercise to revisit the matter at a later date.
“Clearly, this off net charge being levied, therefore, is to force IUC to be brought down despite the heavy burden it puts in the receiving network. We are grateful that this very timely consultation paper to reassess IUC has been issued by Trai," Airtel said in a statement on Wednesday.
Meanwhile, Jio has also said that these charges will only continue till the time the regulator abolishes the IUC.
In September 2017, Trai had ordered a reduction in IUC to six paise per minute from 1 October 2017 from 14 paise earlier and an end to it from 1 January 2020. Telecom operators, already reeling from a fierce price war that started with the entry of Reliance Jio Infocomm Ltd in September 2016, were hit hard by the order. At the time Trai decided to scrap IUC, Airtel, Vodafone and Idea had resisted the change, while Jio was in favour.
“Despite Jio having comparable subscribers with rivals, termination of traffic is skewed in favour of incumbents. Now even Jio feels it can’t justify this subsidy forever – them paying IUC charges but still keeping voice calls free. For Jio consumers, this is not good news as they were used to free calls. Jio starting to charge calls is also good for rivals as this is upward movement in tariffs for Jio customers. This gives some breathing room to incumbents," Mahesh Uppal, director at communications consulting firm ComFirst India said.