India’s telecom regulatory body TRAI has reportedly rejected the demand of other mobile operators in the country, who’ve been asking for a fee hike they can charge from Reliance Jio to terminate its calls on their networks.
According to Times of India, TRAI has also asked other mobile operators in the country to provide a ‘requisite number’ of interconnection points to Jio as early as possible, to ensure that consumers do not face the backlash of connectivity issues.
Trai’s decision is certainly good news for Reliance Jio, as it has been facing poor services owing insufficient interconnection points that are required to connect incoming as well as outgoing calls on any mobile network.
Existing mobile operators in the country, which include the likes of Bharti Airtel, Vodafone and Idea Cellular, are asking for higher terminations than the 14 paise per minute fee mandated by TRAI for providing interconnection points. As their business model is at significant risk due to the free outgoing calls service Reliance Jio is offering to its customers.
The call termination charges are regulated by the IUC mandated by TRAI, who is the only authority that can make any changes or revisions. Existing operators have expressed their grievances to the Prime Minister’s office, raising questions over Trai’s decision to review interconnected usage charges (IUC) at the time of Reliance Jio’s launch.
However, sources at TRAI suggest that despite the outgoing call traffic from Jio being much higher, the service provider is already paying high termination charges. According to them, economies of scale play a major part here and hence, there’s no need to worry about any losses.
The report also highlights that IUC rates have been shrinking over the last few years, thanks to a significant rise in call traffic. Last time the rates were revised was back in March 2015, when TRAI fixed 14 paise per minute for wireless to wireless connectivity and reduced it to zero for all domestic call termination for both wireline as well as landline networks.
To recall, Reliance Jio 4G services were made available in the country on September 5. After the plans were announced, many were left awestruck as to how can they offer unlimited outgoing call and 4G data services at such competitive prices. This eventually fueled a price war among Indian telecom service providers, which lead many to bring down prices for calls and data usage.
