Reliance Jio to hold one-on-one talks on additional PoIs with Airtel, Vodafone and Idea

KOLKATA | NEW DELHI: Reliance Jio Infocomm will hold one-on-one talks with Bharti Airtel, Vodafone India and Idea Cellular later this week to ask for additional points of interconnection ( PoIs) for arresting massive call drops its users are facing. The top three incumbent telcos though are likely to drive a hard bargain by pressing for a mobile termination charge higher than the 14 paise/minute fixed by the sectoral watchdog due to the huge inbound traffic from Jio.

The company is likely to demand nearly 6,500-7,000 additional PoIs from the three incumbents on “an immediate basis” in line with its subscriber base/voice traffic growth estimates, a person aware of the matter told ET. Last Friday, the Telecom Regulatory Authority of India (Trai) had asked Jio and the three GSM biggies to resolve the interconnect matter among themselves.

The regulator had warned it would intervene if quality of services declines and consumers suffer. While the top three telcos said they would provide additional PoIs as needed, they are in no mood to give in to Jio’s demands for additional PoIs on the latter’s terms. They are likely to demand a higher termination charge on the grounds that they need more money to spruce up their networks to handle a potential deluge of voice traffic from Jio, triggered by the latter’s free voice offering till December 31. Call termination charges are paid by a telco on whose network a call originates to a peer on whose network the call terminates.

Last month, Jio had demanded 12,500 PoIs from the top three incumbents to initially meet the needs of 22 million customers, but the GSM biggies only released 1,400 PoIs to the 4G entrant.

At press time, Vodafone and Reliance Jio did not respond to ET’s email queries.

‘ADEQUATE POIS’
Both market leader Airtel and No. 3 Idea said they would consider Jio’s request for more PoIs, but added that the ones already provided are more than adequate to cover for the newcomer’s existing customer base.

“We understand that the PoIs provided by us to Reliance Jio is about double of what they need based on the current exchange of traffic with all other operators in India. Having said that, we have invited Reliance Jio for a discussion to understand their additional requirements and will be happy to provide more PoIs,” an Airtel spokesperson told ET over email.

The telco, however, added that one needs to take cognisance of the massive volume of traffic originating from Jio’s network and ensure that the quality of service for Airtel customers is not impacted.

On its part, Idea said that last month, calls of 2.97 million Jio subscribers were terminated on the Idea network.

“Our current allocation of PoIs would in normal circumstances cater to 4.65 million such subscribers, indicating a buffer of 57% in calling capacity, (but) Idea has now decided to proactively, expand capacity with Jio to over 6.5 million subscribers, with the release of 196 additional POIs, shortly.” This additional capacity would “provide for a buffer of 119% against the August subscriber volumes”.

TRAFFIC ASYMMETRY
The carrier, however, said it is incurring increasing costs due to an asymmetry of traffic of 14.5 times between Idea and Jio, a never seen before asymmetry. “…its real cost of termination is significantly higher than the current interconnect settlement charge of 14 paise per minute as prescribed in the present IUC regime,” Idea said.

Unless controlled, the company said, “this induced traffic asymmetry is expected to exacerbate the loss in the coming months”, and called upon Trai’s intervention.

A senior official in know of matters say the hard bargain by telcos on the termination charges issue may actually be a strategy to make sure that the charge isn’t lowered any further, leave alone scrapped. “You ask for more, but settle at status quo. That appears to be the strategy.”

Last year, the regulator had lowered the termination charge to 14 paise/minute from 20 paise, a move which has been challenged in court by the top three GSM carriers. And in its latest discussion paper on interconnect usage charges, the regulator has suggested lowering or even scrapping call termination charges, a proposal that has been decried by incumbent operators, who have accused Trai of regulatory bias.