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Reliance Jio to charge 6 paise per minute to calls made to rival networks

The Week 2019-10-09 00:00:00
Jio said it had paid nearly Rs 13,500 crore as net IUC charges to other operators in the last three years.

Mukesh Ambani-led Reliance Industries launched its 4G mobile telephony service Jio three years ago. The big draw was that voice calls would be free for life. That led to a big disruption across the industry, forcing incumbents to follow suit. On Wednesday, the company announced it would start charging 6 paise per minute to calls made from Jio to other mobile networks as it looks to recover the prevailing interconnect usage charge. 

However, it will also compensate customers by giving free data of equal value. 

Interconnect usage charge (IUC) is the charge levied by mobile telecom networks to handle incoming calls from other networks. 

Telecom Regulatory Authority of India (TRAI) had in 2017 slashed the IUC to 6 paise per minute from 14 paise and had notified that it would be scrapped from January 2020.

However, last month, the regulator floated a fresh consultation paper to see if that date needed to be revised. While the consultation paper would have brought a huge relief for incumbent operators like Airtel and Vodafone Idea, Jio was not too happy.

“The amendment to the IUC Regulations in 2017 was after considerable deliberations and consultations. In this background the consultation paper has created regulatory uncertainty and therefore Jio has been compelled, most reluctantly and unavoidably, to recover this regulatory charge of 6 paise per minute for all off-net mobile voice calls so long as IUC charges exist,” Reliance Jio said in a statement.

Justifying its stand, Jio said it had paid nearly Rs 13,500 crore as net IUC charges to other operators in the last three years. 

It further alleged that after TRAI reduced IUC in 2017, incumbent operators reduced voice tariffs for their 4G customers, but continued to charge “exorbitant” tariffs for their 35-40 crore 2G customers and raised tariffs for voice calls to around Rs 1.50 per minute.

Due to this, 2G customers of Vodafone Idea and Airtel were giving missed calls to Jio customers. It says Jio network receives 25-30 crore missed calls on a daily basis.

“This huge missed call phenomena converts the incoming calls to Jio into outgoing calls from Jio to other operators. The 25 to 30 crore missed calls per day should have resulted in 65 to 75 crore minutes of incoming traffic to Jio. Instead, the call back made by the Jio customers results in 65 to 75 crore minutes of outgoing traffic,” it said. 

Starting today, for all the recharges made by Jio customers, calls made to other networks will be charged at 6 paise per minute. Jio users will have to buy an additional top up voucher. Post paid customers will also be billed  6 paise per minute for outgoing calls with increase in free data entitlement to that extent.

Jio said the charges will be levied till the time TRAI abolishes IUC. Also the charges will not be applicable to calls made to other Jio customers, to landlines and calls made using WhatsApp, FaceTime or other similar platforms. There will also be no charges for incoming calls.

How rivals such as Airtel and Vodafone Idea now react to Jio’s move needs to be seen.