Bharti Airtel has accused Reliance Jio of ending competition in the telecom sector in India by creating a monopoly. The telecom companies are at war over interconnect usage charges and are taking digs at each other.
Bharti Airtel has accused Reliance Jio of ending competition in the telecom sector in India by creating a monopoly. The telecom companies are at war over interconnect usage charges and are taking digs at each other. Airtel has said that Reliance Jio wants to transfer its cost to Airtel and other incumbents using the proposal to scrap the interconnect usage charge (IUC) and going for a ‘bill and keep’ regime. Airtel has alleged that under the new IUC model, the Mukesh Ambani led company will keep transferring costs of Rs 15,000 crore to Rs 20,000 crore per year, to rivals telecom companies which will eventually kill competition. Earlier, Airtel and Vodafone had contended that telecom infrastructure in rural areas majorly depend on revenue generated from incoming calls, and lowering or removal of such charges hamper the services. Meanwhile, Jio claimed that it will provide 99 per cent coverage by the end of 2017 even if mobile interconnection charges get dropped.
When it comes to Reliance Jio’s allegations that Airtel earns excess revenue from Mobile Termination Charge (MTC), the latter claimed them as “false and laughable”. Airtel has claimed that the ‘with the tsunami of calls originating from Reliance Jio network’, it loses 21 paise per minute, which has eventually resulted in a loss of Rs 550 crore per quarter for Airtel alone. MTC is essentially a clearing house where one operator pays another for using its network to carry incoming calls, Airtel said in a statement. Airtel said there is no country in the world where MTC and incoming calls both are free. Meanwhile, Ravi Gandhi, Chief Regulatory Officer, Bharti Airtel 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.”
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Gandhi added, “At the same time, it allows Reliance Jio to continue with its strategy of predatory pricing and ultimately throttle all competition. This is the sinister design of Jio. The question to ask does is India want a monopoly situation in telecom?”
Trai in an affidavit filed before the Supreme Court in 2011 had said telecom operators should be given time till 2014 to move to the bill and keep regime. Under this, operators only keep a record of incoming calls on their network but do not raise any demand from other operators. Meanwhile, such a barrage of words from Airtel comes after the rival companies exchanged sharp words at an open house held by TRAI, where RJio had said that IUC should be scrapped.