NEW DELHI: Three years after it began services with the game-changing promise of free voice-calling, Reliance Jio will start charging customers for calls made to networks of other operators such as Airtel and Vodafone-Idea. Jio, which has raced to become the largest mobile company in India in these three years, apart from being the only profitable telecom venture, said it would charge customers at the rate of 6 paise per minute “starting today”.
Blaming the decision on “regulatory uncertainty” related to inter-connect payments (IUC), Jio said it would rescind the move only when regulator Trai dismantles the IUC payments and makes call-termination charges zero. IUC charges are the money that a mobile company pays to others for connecting its calls.
“… Jio has been compelled, most reluctantly and unavoidably, to recover the regulatory charge of 6 paise per minute for all off-net (meaning to other operators) mobile voice calls so long as IUC charges exist,” the company said. Calls made to any network outside Jio will not be connected if customers do not buy a top-up (minimum of Rs 10 for 124 free minutes and 1 GB additional data) with a special voucher that takes care of IUC charges.
Jio’s fierce rival Airtel, however, said the move was a pressure tactic being deployed by the new operator. “Clearly, this off-net charge being levied… is to force IUC to be brought down despite the heavy burden it puts on the receiving network,” Airtel said, adding that the 6 paise IUC charge is “already significantly below the real cost of completing calls”. Airtel said the telecom industry is passing through a state of “deep financial stress… with several operators having gone bankrupt and thousands of jobs having been lost.” Vodafone-Idea called Jio’s decision an “action of undue haste”.
Trai recently decided to reevaluate the IUC charge rates (through a consultation paper) against an earlier proposal to do away with the payment altogether from January 2020. Jio is protesting the re-think, and said that continuance of IUC payment is a huge financial burden on its business.
The IUC battle has already seen the companies adopt novel ways to avoid the payment and shift it on rivals. Telecom companies had recently cut the ringing time on an outgoing call to around 25 seconds, the measure seen as a move to ensure that calls made from their network are not picked up. A shorter ringing time will mean that calls will be cut before they are picked up, prompting the customer to call back.
For example, if a Jio customer’s call to an Airtel number is not picked up quickly, it results in a missed call. This would prompt Airtel customer to call back the Jio number, enabling the latter to earn IUC payment rather than pay it.
Jio claims that as many as 35-40 crore 2G customers of Airtel and Vodafone-Idea give missed calls to its customers as its tariffs are the lowest. “Jio network receives 25 to 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.”
Bharti Airtel surged 5.2% on Wednesday to close at Rs 359.3, while Vodafone Idea gained over 14% to Rs 5.84 on a day when sensex rose 1.7%.