After the successful rollout of Reliance Jio 4G services, other top telecom companies have made it clear to the Prime Minister’s office that they can not afford to accept the former’s request to provide interconnection points. This is because they do not have the resources to terminate Jio’s massive asymmetric voice calling traffic that has resulted from the ridiculously cheap rates (if they weren’t already cheap).
A COAI letter sent to the PMO states that the volumes of asymmetric voice traffic from about 100 million Reliance Jio users has the potential to reduce the “weighted average voice realisation” of the incumbent operators to reduce from 30 paise per minute to 22-25 paise per minute.
The telecom lobby also said that the other operators might be forced to liquidate before the weighted average voice realisation is achieved. This will result from a potentially double traffic from Jio, than their own network.
The Points of Interconnections (POIs) requested by the Mukesh Ambani-led company is that the Jio calls go through smoothly, and other companies are obliged to provide that. However, with such cheap rates, it becomes a different scenario.
The Jio services were rolled out on 5 September with an offerings arraying from minimum prices, and almost all of them offering free and unlimited voice calls and data for different periods of time. A report by the COAI suggested that the average traffic ratio of incoming to outcoming is 1:1, but the beta test results of Jio suggest a 10:1 ratio. This essentially means that for every minute of call that a Jio user receives, he/she makes 10 minutes of call (incoming calls are free).
The COAIs worry is that Reliance will probably be able to make its money from the data revenues, or acquisitions or its other companies, but the other operators might be forced to quit the market and eventually resulting in Jio monopolising the market.
As the Idea, Vodafone and Airtel shares take a massive plunge in the market, the companies are busy explaining to users how their plans are better than that of Jio. It is an open secret that this development has hit the other players hard, and things get dirtier by the minute, as the industry standards of competition have been shattered. All this comes with an estimated $20 billion investment from Mukesh Ambani and investors.