Vodafone Idea, Airtel reject Jio’s contention on IUC

Highlights

  • Mukesh Ambani-led Jio wants Trai to scrap IUC charges by January 2020
  • Telecom User Group (TUG), a consumer body, backed Jio’s call
  • Airtel has dismissed Jio’s allegation that Airtel and Vodafone Idea are using 2G technology deliberately to receive termination charges with an intent of undue enrichment.
  • Jio is still a net payer of IUC, while Airtel and Vodafone Idea are net recipients
KOLKATA: Vodafone Idea and Bharti Airtel have rejected Reliance Jio Infocomm’s contention that continuing with interconnection usage charges would encourage them to keep users on 2G and disincentivise upgrading to 4G, saying such views disregard basic consumer choice principles, especially when there is freedom to switch operators.

Mukesh Ambani-led Jio has maintained that if the Telecom Regulatory Authority of India postpones the scrapping of IUC from the planned January 2020 deadline, it would end up “subsidising two economically inefficient operators at the cost of users.”

The provision of such subsidies, Jio said, “is not within the domain of Trai’s functions,” adding that the regulator should “ensure maximum benefits to consumers” and ring in “newer more efficient technologies.”


Telecom User Group (TUG), a consumer body, backed Jio’s call, saying the zero-termination charge regime must be implemented next January as it would bring down costs, foster innovation and serve consumer interests.

The submissions were made in counter-comments by stakeholders on Trai’s paper seeking views on deferring implementation of a zero-IUC regime. Vodafone Idea, however, has asked Trai to “reject Jio’s baseless allegations” as “full choice is available to a mobile customer to port from one operator to another” and added that the sale of 8-10 million 2G/3G devices a month is also attributable to consumer demand and behaviour.

Airtel said, “Jio wants us to cruelly shut off our 2G networks simply to provide 4G services to the well-heeled, even when 30 million 2G feature phones are being bought every quarter by poor/low income customers with low digital literacy.” It said that when it comes to customers, Airtel believes in “choice over coercion.”
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The Sunil Mittal-led telco dismissed Jio’s allegation that Airtel and Vodafone Idea are using 2G technology deliberately to receive termination charges with an intent of undue enrichment.

“IUC is the compensation of actual costs incurred by an operator in carrying/terminating a call on its network… this cost neither changes nor has any co-relation with tariff charged by originating operator,” Airtel said in its counter-comments.

Jio is still a net payer of IUC, while Airtel and Vodafone Idea are net recipients, underlining the reasons for their stands.

Jio reiterated that Trai’s IUC review paper “awards malpractices of incumbents and is opposed to public interest.”
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“If incumbents are in financial distress, their remedy lies in obtaining relief from their bankers, financiers and the government in the form of restructuring of statutory levies… they cannot expect a bailout from consumers,” Jio said in its countercomments to the regulator.

Some analysts expect Jio to benefit, regardless of the outcome of Trai’s consultation, as it is the market leader in voice minutes.
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