Friday, 29 May, 2020

Reliance Jio vs Airtel: Why operators are fighting over interconnect usage charges

Jio interconnect usage charges top-up pack start from Rs 10 Heres all you need to know All the incoming voice calls outgoing Whats App calls calls to landlines will continue to be free for all the users. Image Reuters
Cecil Davis | 10 October, 2019, 19:15

Currently, Jio charges only for data, and voice calls to anywhere in the country and to any network are free. The Mumbai-headquartered telco on Wednesday claimed that the new voice charge would be at the prevailing Interconnect Usage Charge (IUC) rate that has been fixed by the Telecom Regulatory Authority of India (TRAI) for mobile operators enabling inter-networking outgoing calls - also known as off-net voice calls.

Under this plan, Jio offers 124 IUC minutes to non-Jio numbers. This charge is called Interconnect Usage Charge (or IUC) and had been subsidized by Jio for its valuable customers.

".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", the statement said.

Billionaire Mukesh Ambani's Reliance Jio will charge 6 paise per minute for voice calls made to other network operators like Bharti Airtel and Vodafone Idea.

So far, in the last three years Jio claims to have paid almost Rs 13,500 crore as NET IUC charges to other operators. This is for the first time that users will have to pay for making a phone call from Jio.

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"Jio will provide additional data entitlement of equivalent value based on IUC top-up voucher consumption".

The possible change of timeline for introducing zero IUC, Jio said had led to the uncertainty of IUC phase-out deadline and it can't continue to bear Rs 13,500 crore losses on account of IUC by offering free voice calls to rivals' network from its network.

Reliance Jio in its statement to customers has assured that the IUC charge will continue only till TRAI abolishes IUC completely. It added that the telecom industry has been in a state of "deep financial stress" for the last three years with several operators having gone bankrupt and thousands of jobs having being lost. Calling has been free since Reliance Jio was launched in September 2016. The 25 to 30 crore missed calls per day should have resulted in 65 to 75 crore minutes of incoming traffic to Jio.

But recently, Trai made a decision to seek views on deferring the implementation of the zero-IUC regime, saying that millions of subscribers have still not moved to Voice over LTE (VoLTE), or a data based network, which was expected to lower the cost of generating a call, rendering IUC redundant. The new rules will apply on all recharges done by Jio customers starting Wednesday. "They also charge a minimum of Rs 500 / GB for data from their 2G customers". Instead of investing on upgrading their networks, it makes business sense for incumbent operators to keep tariffs high for lower-income subscribers so that they give a missed call whenever they want to talk to someone.