Country’s largest telecom operator Bharti Airtel has asked for interconnection usage charges (IUC) to be increased as India needs competition, not a monopoly in the sector. The company also claims that it had to bear a loss of Rs 550 crore per quarter as the current IUC, at just 14 paise, is low.
“By proposing a transition to the ‘Bill and Keep’ regime with zero mobile termination charge (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. Such cost transfer will allow Reliance Jio to use its muscle power and price its services in a predatory manner to kill the rest of the industry and create a monopoly,” Airtel said in a statement on Thursday.
Ravi Gandhi, chief regulatory officer, Bharti Airtel, said, “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.
Barring four countries, the 'Calling Party Pays' regime is the globally-accepted norm. In these four countries where MTC is zero, the customer pays for incoming calls. However, nowhere in the world do we have a situation where incoming calls are free and MTC is also zero.
While existing operators are demanding an increase in IUC rates, Reliance Jio wants it to be scrapped.
If the demand of Reliance Jio is met, it will continue with its strategy of predatory pricing and ultimately throttle all competition. “This is the sinister design of Jio”, the statement said.
“The allegations made by Reliance Jio regarding Airtel earning excess revenue from MTC are not only false but laughable,” the statement said.
Telecom Regulatory Authority of India-mandated MTC of 14 paise is well below the cost of producing a minute, which is currently at 35 paise.
In fact, with 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.
...& ANALYSIS
- Incumbents say terminating incoming calls on their networks costs 30-35 paise
- Airtel said Jio wants to simply transfer its cost to Airtel and other operators
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