Interconnection: Airtel says it is losing Rs. 550 crore per quarter due to calls from Reliance Jio’s network


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After an open-house held by Telecom Regulatory Authority of India (TRAI) today regarding interconnection usage charges (IUC) where Reliance Jio proposed to make IUC zero, Airtel has sent out a release saying that Reliance Jio is creating monopoly, throttling competition by proposing zero IUC. “By proposing a transition to the ‘Bill and Keep’ regime with zero MTC, Reliance Jio wants to simply transfer its cost to Airtel and other operators,” said Airtel.

It also said that this would cost the operators to the tune of Rs 15,000 – 20,000 crores per year. “Such cost transfer will allow Reliance Jio to use its muscle power and price its services in a predatory manner to kill the rest of the industry and create a monopoly,” it added.

Reliance Jio said that Airtel is earning excess revenue from Mobile Termination Charge (MTC), and two of established operators had made “excess recovery” to the tune of nearly Rs 1.2 lakh crore, but Airtel said that these claims are not only false but laughable.

Back in 2015 TRAI mandated MTC of 14 paise per minute from 30 paise to 20 paise per minute back in 2009. Airtel claims that it is well below the cost of producing a minute, which is currently at 35 paisa. Airtel said that it loses 21 paisa for every minute due to tsunami of calls originating from Reliance Jio’s network on its network, so it is losing Rs. 550 crore per quarter.

Incumbents such as Airtel, Idea Cellular and Vodafone India are against Reliance Jio’s proposal of making IUC zero. Instead they are demanding for IUC to be raised to 30-40 paise per minute from 14 paise per minute. TRAI Chairman RS Sharma today said that it will soon review interconnection usage charges (IUC).

Ravi Gandhi, Chief Regulatory Officer, Bharti Airtel said:

In effect, Reliance Jio aims to build its business by getting a free ride on the highways built by Airtel and other operators. Their proposal to move to Bill and Keep will further burden other operators and make them weak. At the same time, it allows Reliance Jio to continue with its strategy of predatory pricing and ultimately throttle all competition. This is the sinister design of Jio. The question to ask is does India want a monopoly situation in telecom?


Author: Srivatsan Sridhar

Srivatsan Sridhar is a Mobile Technology Enthusiast who is passionate about Mobile phones and Mobile apps. He uses the phones he reviews as his main phone. You can follow him on Twitter and Instagram