Citing regulatory uncertainty over the review of sunset clause for call termination charges, Reliance Jio on Wednesday announced it will charge customers 6 paise per minute for voice calls made to other networks like Airtel, and Vodafone Idea, and will compensate users by giving them free data of equal value.
Sunil Mittal-led Bharti Airtel, in a statement, said that the move by Jio was aimed to “force IUC (interconnect usage charge) to be brought down”, adding that the ongoing review of call connect charges or IUC is consistent with previously-stated intent by the Telecom Regulatory Authority of India (Trai).
In 2017, Trai cut the interconnect usage charge (IUC) to 6 paise per minute from 14 paise and said this regime would end by January 2020. However, it floated a consultation paper to review whether the regime timeline needs to be extended.
Since voice calls on Jio network are free, the company had to bear the Rs 13,500-crore payment made to rivals such as Bharti Airtel and Vodafone Idea.
To recover the losses created by the Trai move, the company has decided to charge customers 6 paise per minute for every call they make to a rival’s network.
This will be the first time that Jio users will pay for voice calls.
Currently, Jio charges only for data, and voice calls to anywhere in the country and to any network are free.
“…The consultation paper has created regulatory uncertainty and therefore Jio has been compelled, most reluctantly and unavoidably, to recover this regulatory charge of 6 paise per minute for all off-net mobile voice calls so long as IUC charges exist,” Jio said in its statement.
In its statement responding to Jio’s decision, Airtel said, without naming the company: “One of our competitors has imposed a rate of 6 paise for all off net calls made to other operators to cover the termination charge of IUC. They have gone on to suggest that TRAI has re-opened this issue”.
Airtel argued that the review was, in fact, in line with Trai’s stated position on the matter in 2017 where it had made it clear that the issue will be revisited based on factors like adoption of new technologies (their impact on termination cost) and traffic patterns.
“Both these have not materialised. There are still over 400 million 2G customers from the poorest sections of society living in rural areas paying less than Rs 50 per month and who can still not afford to buy a 4G device. Second, there still is significant asymmetry of traffic,” Airtel said.
“The announcement by one of the telecom service providers today to charge for calls made to other service providers to cover the termination charge of IUC is not only an action of undue haste but it also does not bring out the fact that interconnect is a settlement between operators and not a consumer pricing matter,” Vodafone Idea said in a statement.