A major regulatory battle has ensued between incumbent operators like Bharti Airtel, Vodafone India and Idea Cellular on the one hand and Mukesh Ambani’s Reliance Jio Infocomm, which is yet to commercially launch its services, on the other
A major regulatory battle has ensued between incumbent operators like Bharti Airtel, Vodafone India and Idea Cellular on the one hand and Mukesh Ambani’s Reliance Jio Infocomm, which is yet to commercially launch its services, on the other. The Cellular Operators Association of India (COAI), of which all four are members but is dominated by the first three, has written to the department of telecommunications secretary JS Deepak, complaining that RJio’s test launch services is nothing but full-fledged services in the guise of a trial run.
Why the fight
* RJio is offering free services & connections calling it test services
* It has notched up 1.5 million users with average data consumption of 26 GB per month & voice usage of over 355 minutes
* COAI says RJio should file its tariff plans with Trai
* Huge traffic imbalance between outgoing calls from RJio’s network compared to incoming traffic
* Traffic imbalance between incumbents is only 1-2% vs 85-90% with RJio
* This chokes interconnect points of incumbent operators
It has alleged that such trial services, which have notched up 1.5 million subscribers, is in gross violation of rules and is choking their points of interconnect (PoI), thus causing bad services to their paid users.
The COAI has threatened that if such practises of RJio are not reined in, its members would no longer provide it PoIs, which are essential to connect subscribers of two different networks to complete a call.
As is known, RJio is offering free connections and services to its employees as well as to general subscribers on invitation. Since the services have not been launched commercially, no tariff is being filed with the Telecom Regulatory Authority of India (Trai). Though it is paying termination charges to the terminating networks of Bharti, Vodafone and Idea, the traffic imbalance is huge — for instance, the traffic being handed over by RJio to these operators is around 85-90%, while traffic imbalance between Airtel, Vodafone and Idea is to the tune of only 1-2%. Though Bharti, Vodafone and Idea get a termination charge from Jio at 14 paise per minute, it is not sufficient because it is calculated on incremental basis and not on full cost. On a full-cost basis, the termination charge comes to around 35-40 paise per minute. The calculation on incremental cost basis is fine if the traffic imbalance is within 5-10% but is not sustainable if it is as high as 85-90%, hence the COAI has taken up the cudgels on behalf of the three operators.
The high traffic imbalance — more people calling from RJio’s network to others — is because of the free services being offered by RJio. COAI says that apart from financial loss it causes to incumbent operators, it also chokes their networks, thus impairing the services of their paid subscribers.
Officials aware of regulatory matters told FE that technically any test services should be within closed networks and the moment a service connects to open networks, it ceases to be a test service. This way, RJio should be filing its tariffs, even if they are zero, with Trai. Not doing so is wrong in law. Reliance Jio did not comment on the COAI’s letter.
The timing of the COAI missive suggests that a major war has broken out between the country’s top three operators and RJio, where the former are alleging that the regulator is siding with the latter. This is apparent from two counts — COAI issued a statement a day back expressing anguish as to how a series of recent regulations by the Trai is biased and aimed at aiding new operators. This was after Trai last week came out with a consultation paper on reviewing termination charges not only much ahead of its schedule but also favouring a zero payment model, which helps newer operators. Tuesday’s letter is also interestingly addressed to the DoT secretary rather than the Trai chairman, when matters relating to tariff and interconnect are the regulator’s domain.