scorecardTelecom operators escalate war with Reliance Jio; say they are not obliged to give interconnection points
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Telecom operators escalate war with Reliance Jio; say they are not obliged to give interconnection points

Telecom operators escalate war with Reliance Jio; say they are not obliged to give interconnection points
StrategyStrategy1 min read
Reliance Industries Chairman Mukesh Ambani, during the launch of Reliance Jio in his annual general meeting, had pushed other telecom operators to provide interconnect points after he announced free calls from Jio to any other server.

But, the incumbent carriers are in no mood to do so. In a letter to the Prime Minister's Office (PMO), India’s top telecom operators have said they can’t oblige to Ambani-led Reliance Jio Infocomm's requests for interconnection points.

The carriers have said they do not have the network and the financial resources to adjust huge traffic coming in from Reliance Jio.

"Unloading tsunamis of asymmetric incoming voice traffic from a (potential) 100 million Reliance Jio customers can lead to the weighted average voice realisation of existing operators plunging from 30-40 paise per voice minute to 22-25 paise per voice minute or even lower," said Cellular Operators Association of India (COAI) in its letter to Nripendra Misra, principal secretary at PMO, which was assessed by ET.

Furthermore, the association has warned the present telecom companies will go into liquidation long before this reduced weighted average voice realisation is reached.

"Reliance Jio may well make up some part of this massive voice cross-subsidy by way of data revenue realisations, by way of customer acquisitions/churn, but it becomes abundantly clear that the overwhelming burden of this free lunch is sought to be passed on to rival operators through tariff manipulations, which exploit the Interconnect Usage Charge (IUC) regime, and offload tsunamis of asymmetric voice traffic that will choke and financially destroy competition," Rajan Mathews, director general of the COAI, told ET.

The COAI has stated the incoming-to-outgoing traffic ratio in India is normally 1:1, but Jio's beta tests had tended to veer it towards an asymmetric 10:1, and this would undoubtedly lead it to a 15:1ratio once its (potential) 100 million subscribers grow accustomed to unlimited free voice service.

"The voice services for Jio are experiencing high congestion. Since you are a high-value customer, this will impact your business," Idea told dealers in a presentation.

(Image: Thinkstock)

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