Bharti Airtel today rejected Reliance Jio’s claim that incumbents were hugely benefited from call connection charges and said it suffered losses to the tune of Rs 550 crore every quarter due to ‘tsunami of calls’ that originated from the network of the new entrant. The Sunil Bharti Mittal-led firm said Jio’s demand to end mobile termination charges (MTC) is a “sinister design” to “continue with its strategy of predatory pricing and ultimately throttle all competition”.
“The allegations made by Reliance Jio regarding Airtel earning excess revenue from MTC are not only false but laughable,” the New Delhi-headquartered said in a statement. It said that the Telecom Regulatory Authority of India (TRAI) mandated MTC of 14 paise, which is less than the cost of producing a call minute, “which is currently at 35 paise”.
“…the tsunami of calls originating from Reliance Jio’s network, Airtel loses 21 paise for every minute that is carried on its network. This has resulted in a loss of Rs 550 crore per quarter for Airtel alone,” the company said. Jio in its presentation before TRAI has said that ‘number one’ operator, hinting at Airtel, has made excess of Rs 73,000 crore from interconnection usage charges (IUC).
Telecom operators levy IUC on incoming calls from the network of the other operators. These charges are passed on to subscribers by respective service providers. A Jio representative at an open house discussion held by TRAI reiterated that telecom operators have benefited to the tune of over Rs 1 lakh crore after the sector regulator allowed continuation of IUC for mobile calls.
TRAI in an affidavit filed before the Supreme Court in 2011 had said telecom operators should be given time till 2014 to move to the bill and keep regime. Under this, operators only keep record of incoming calls on their network, but do not raise any demand from other operators.
“In effect, Reliance Jio aims to build its business by getting a free ride on the highways built by Airtel and other operators. Their proposal to move to bill and keep will further burden other operators and make them weak… The question to ask is does India want a monopoly situation in telecom?” Bharti Airtel’s Chief Regulatory Officer Ravi Gandhi said.
Airtel said by proposing a transition to the ‘Bill and Keep’ regime with zero MTC, Reliance Jio wants to simply transfer its cost to Airtel and other operators. As per current estimates, this cost would be to the tune of Rs 15,000–20,000 crore per year for the industry and will only increase going forward, it added.