Reliance Jio has defended itself against allegations made by the Cellular Operators Association of India, in their letter to the Department of Telecommunications dated August 8. The company was allegedly providing full-fledged services to the public “in the guise of testing”. The association said in its letter that because of Reliance Jio offering free voice and data services, the existing operators are being affected regarding their traffic volumes, and are not adequately compensated by the interconnect usage charge (IUC). This has resulted in huge financial losses to the incumbents.
The incumbent operators have reportedly opposed a downward revision of IUC, which will affect a substantial component of their revenues. IUC, or termination charges, are paid by the call making operator to the call taking operator.
The defense statement by Reliance Jio said that the top three incumbent operators who are against this revision of IUC rates collectively own over 65 percent of the market share in a market where there are over one billion subscribers. Therefore their claims of increased costs are not valid.
As the telecom laws stand, for now, there is no set differentiation between test rollout and commercial rollout of services. COAI has alleged that the volume of voice traffic generated by Jio because of the free services it was offering that was choking already-augmented PoIs. This, in turn, was hurting service quality of operators who have subscribers who pay according to tariffs. In this case, it is unfair for tariff members to provide PoIs.
The letter further elaborated by saying that the high voice traffic on Reliance Jio was choking networks of other companies that have made the effort of commercially rolling out their services. Jio alleged that the industry body “deliberately indulged in an unwarranted vilification campaign” against the company and TRAI.
The publicly outspoken complaints by the incumbents were provoked by the companies because of a consultation paper issued by the regulatory authority that proposed to abolish call termination charges paid to the company on whose network the call ends).
Jio also alleged that this was an attempt by the existing companies to restrict entries of the newcomers who would benefit if such a thing was implemented. Fewer subscribers would essentially mean fewer call ends on their part.
The recently established TRAI has been in the middle of several such battles between the service providers. This one is the loudest of them all.