scorecardJio will charge you for calls to other networks but Airtel and Vodafone won't⁠— Here's why
  1. Home
  2. business
  3. telecom
  4. news
  5. Jio will charge you for calls to other networks but Airtel and Vodafone won't⁠— Here's why

Jio will charge you for calls to other networks but Airtel and Vodafone won't⁠— Here's why

Jio will charge you for calls to other networks but Airtel and Vodafone won't⁠— Here's why
Business3 min read
Vodafone-Idea and Airtel offer unlimited free calling to other networks like Reliance Jio has to limit IUC minutes to 1,000 per month on average    BCCL, IANS, Business Insider India

  • Vodafone-Idea and Airtel have removed all caps on unlimited outgoing calls to other networks, using Jio’s own ‘free’ strategy against it.
  • Jio users will still be limited by an average of 1,000 free IUC minutes per month.
  • And, the company can’t afford to not charge its customers.
Bharti Airtel and Vodafone-Idea customers don’t have to pay for outgoing calls to other networks — but Jio users aren’t that lucky. Even though tariffs have risen across the board, Jio’s competitors are now using its own strategy against the company by offering free unlimited calling.

Once lauded for being ‘free’, Jio’s ‘all-in-one’ plans now only come with a limited number of IUC minutes — 1,000 minutes per month on average. Once those minutes run out, customers are charged 6 paise per minute.

Initially, Airtel and Vodafone-Idea had capped the number of IUC minutes for their plans as well. But, on Friday, they did a complete 180 — all calls would continue to be free. While it wasn’t the best news for Jio, it’s an indicator that some of the pricing power still lies in the hand of the consumer.

The tables have turned since 2017 when Airtel, Vodafone and Idea were asking the Telecom Regulatory Authority of India (TRAI) to raise the IUC while Reliance Jio was asking that it be scrapped altogether.

"When you go below that cost, that is a very straightforward situation of predatory pricing,” Bharti Airtel chairman Sunil Mittal told ET at the time.

What’s changed

With Airtel and Vodafone-Idea offering unlimited free calling to other networks, Jio’s claim of offering its users four times the benefits despite a 40% increase in tariffs is undermined. Both Airtel and Jio offer a 56-day plan for ₹399 — but now Airtel’s will be considered cheaper because it doesn’t have any limits on IUC minutes.

Despite the backlash, Jio claims that the minutes it’s offering are more than enough to cover the average user. “Entitlement for off-net calls in Jio’s ‘all-in-one’ plans is more than five times of what an average customer uses as per industry data and consequently, an average Jio customer is unlikely to have to ever pay for off-net calls,” said the company.

Here’s why Jio has to charge its customers

The telecom department’s interconnect usage charge (IUC) means that a fee is owed by the network where the call originated to the network where the call was received. In a perfect world, the IUC would even out between the three players.

Instead, more than half of the calls in India originate on a Jio network, according to India Ratings. “Net incoming minutes as a proportion of total off-net voice minutes stands at negative 29% for Reliance Jio whereas the same is 9% and 19% for Airtel and Vodafone-Idea respectively,” said the report.

Simply put, the number of people calling a Jio number from the Vodafone-Idea or Airtel SIM is significantly lower than the Jio users calling people with other service providers.

So even while Vodafone-Idea and Airtel will have to bear some of the cost — they still have more to gain. And, users who have been using Jio numbers as a secondary SIM card, may start shifting back to their primary telecom operator.

See also:
Jio’s new recharge plans can be confusing — here’s how to figure them out

Reliance Jio is paying the price for being the ‘second SIM’ of choice

Reliance Jio asks TRAI to either reduce or remove IUC charges