Airtel accuses Reliance Jio of creating monopoly

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In response to Airtel's and Idea's changes to increase the IUC charges, Reliance Jio alleged that both the telecom operators had made excess recovery of around Rs 1.2 lakh crore in Interconnection Usage Charges (IUC) over the actual cost of termination in the last five years, dismissing claims that they are incurring losses due to the reduction in call connect charges. TRAI may increase the IUC so that they will remove their costs.

In a statement, Bharti said that by proposing a transition to bill and keep (BAK) with zero MTC, Jio wants to transfer its cost to other operators, which as per current estimates is to the tune of '15,000-20,000 crore annually and will increase going forward. In the four countries where MTC is zero, the customer pays for incoming calls. Therefore, the CPP regime has what is called Mobile Termination Charge (MTC).

The TRAI is likely to ask telcos to explain their views on a minimum floor price for tariffs, and also the formulation or math for the fixing such a rate.

Attacking the BAK model, the incumbents said that it does not address the issue of asymmetric traffic, which is impacting their operations post Jio's launch. It said that IUC as a percentage of blended retail mobile price is now 1 per cent in China, 9 per cent in United Kingdom, 11 per cent in France, and 13 per cent in Japan. Besides, around 40-50% of the subscribers of the top operators are in the rural areas, hence analysing the coverage based only on geographical area is not a valid argument.

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"Traffic asymmetry will always exist in a competitive market".

However, industry body Cellular Operators Association of India's (COAI's) director-general Rajan Matthew said, "Earlier there was a net set off between the incumbent operators as the numbers of calls terminating between their networks were more or less symmetrical".

"We are working on a new framework for IUC charges", he added. "If it is not waived, then it does not help the consumer down below or public interest", said Majeed Memon, a Rajya Sabha lawmaker from the Nationalist Congress Party.

The telecom regulator, which is looking to conclude the review of interconnect charges soon, is not likely to heed to the demands of incumbent operators to share with them the details of the methodology it had adopted for deciding the charges, which now stands at 14 paisa per minute. "This has resulted in a loss of Rs 550 crore per quarter for Airtel alone", said Gandhi.

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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". Reliance Jio said it wouldn't charge any incoming calls.

"Trai should follow global practice of making termination charge zero and pave way for encouraging new technologies in the country", Alvi said.

"We have had a consultation paper, we had comments, counter comments, a workshop day before yesterday and today we had this OHD".

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