It is an open secret that Reliance Jio has completely changed the telecom market with its lucrative offers and aggressive strategy. An Indian consumer is happy with this change in the telecom market but the telecom operators have felt the heat and suffered losses.
Just recently Reliance Jio has made a claim that the other telecom operators have earned a lot from the call connection charges. It hints at Airtel, saying that it has alone earned more than Rs 73,000 crore from interconnection usage charges (IUC). However, Sunil Bharti Mittal-led telecom operator Airtel not only rejected the claim but also said that it suffered loss to the tune of Rs. 550 crore per quarter because of the ‘tusnami of calls’ which come from Jio.
The firm has alleged that Jio’s attempt to end the mobile termination charges (MTC) is a part of its “sinister design” so that it can “continue with its strategy of predatory pricing and ultimately throttle all competition”.
A statement was issued by Airtel which read,
“The allegations made by Reliance Jip regarding Airtel earning excess revenue from MTC are not only false but laughable.”
The statement also reads that the Telecom Regulatory Authority of India (TRAI) has fixed the MTC at 14 paise, while the cost of producing a call minute is 35 paise. The statement says,
“…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 telecom operators charged IUC on those incoming calls which come from other networks and these charges are then transferred to the subscribers by the network providers. During the open house discussion organized by TRAI, a representative of Jio claimed that the other operators earned more than Rs. 1 lakh crore after IUC was allowed by TRAI for mobiles.
In 2011, TRAI submitted an affidavit in SC, stating that the telecom operators should be allowed to move to bill and keep regime till 2014. In this regime, a network provider will keep the record of incoming calls from other networks but won’t make any demand from the networks.
Chief Regulatory Officer of Airtel Ravi Gandhi, said;
“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 as is does India want a monopoly situation in telecom?”
According to Airtel, the intention of Reliance Jio is to transfer its cost on the other operators by transferring to ‘Bill and Keep’ regime with no MTC. As per the current data, the cost that is borne by the operators is Rs. 15,000-20,000 crore annually and it will increase further from here.