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Mukesh Ambani's Jio to charge users 6paise/min for voice call to rival networks

New Delhi: Billionaire Mukesh Ambani's Reliance Jio will, for the first time ever, charge a small 6 paisa per minute for voice calls made by its users to mobile phone networks of rivals such as Airtel and Vodafone Idea to recover a charge that could last beyond the previously set December 31, 2019 deadline.

Blaming regulatory uncertainty caused by TRAI reopening sunset clause of the so-called interconnect user charge (IUC), Jio in a statement said the charge would last till such time that regulations require payments to rival networks for completing calls. Jio, however, said it will compensate the users by giving free data of equivalent amount.

Jio, which charges users on its 4G telecom network only for data usage while voice calls to anywhere in the country are free, said the new charge would not be applicable on calls made by its users to other Jio phones and to landline phones as well as on calls made using WhatsApp, FaceTime and other such platforms. Incoming calls from all networks will continue to be free.

Telecom regulator TRAI in 2017 had slashed IUC to 6 paise per minute from 14 paise and had proposed to end the regime on December 31, 2019, after considering various factors. But it has now floated a consultation paper to review whether the timeline needs to be extended.

Since voice calls on Jio network are free, the company had to bear the Rs 13,500 crore payment made to rivals such as Bharti Airtel and Vodafone Idea, Jio said, adding that to recover the losses created by the TRAI move, the company has decided to charge customers 6 paise per minute for every call they make to a rival's network.

This will be the first time that Jio users will pay for voice calls.

Airtel reacted to the move by saying that the Telecom Regulatory Authority of India (TRAI) had in September 2017 specifically mentioned that it will, if need be, re-visit the zero IUC regime plans.

Welcoming TRAI reopening IUC charge issue, Bharti Airtel said there was still significant asymmetry of traffic and given the massive non-data using 2G customers base in India, the cost of "the call at 6 paise is already significantly below the real cost of completing the call."

Jio said the TRAI consultation paper seeking to reopen sunset clause of IUC "has created regulatory uncertainty and therefore Jio has been compelled, most reluctantly and unavoidably, to recover this regulatory charge of 6 paise per minute for all off-net mobile voice calls so long as IUC charges exist."

For all recharges done by Jio customers starting Wednesday, calls made to other mobile operators will be charged at the prevailing IUC rate of 6 paise per minute through IUC top-up vouchers till such time that TRAI moves to zero termination charge regime.

"Jio will provide additional data entitlement of equivalent value based on IUC top-up voucher consumption. This will ensure no increase in tariff for customers," Jio said.

Jio is offering IUC top up voucher starting from Rs 10, that will yield 124 IUC minutes, but will also offer additional data worth 1GB to its customers so that there "is no effective tariff increase till 31 December 2019".

Similarly, post-paid customers will be billed at 6 paise per minute for off-net (outside network) outgoing calls with proportionate increase in free data entitlement.

The firm went on to cite affidavits submitted by TRAI in the Supreme Court saying IUC for mobile calls will be zero from January 1, 2020.

"Relying on the repeated stance of TRAI and the amendment already made to the regulations reducing the IUC to Zero, Jio continued to pay IUC from its own resources to Airtel and Vodafone-Idea etc while offering free voice to its customers. So far, in the last three years Jio has paid nearly Rs.13,500 crore as NET IUC charges to the other operators," it said.

After the September 2017 order of TRAI, while the incumbent operators reduced voice tariffs for their 4G customers, they continued to charge exorbitant tariffs of around Rs 1.50 per minute to their 35-40 crore 2G customers, Jio said. "They also charge a minimum of Rs 500 / GB for data from their 2G customers."

"The price differential of free voice on Jio network and exorbitantly high tariffs on 2G networks causes the 35-40 crore 2G customers of Airtel and Vodafone-Idea to give missed calls to Jio customers," it said, implying that Jio users called back on missed calls, leading to the company having to pay Airtel and Vodafone-Idea for IUC.

Jio network receives 25 to 30 crore missed calls on a daily basis, which results in 65 to 75 crore minutes of outgoing traffic, the statement said.

"But for the effects of the tariff differential, especially the missed call phenomenon, the off-net voice traffic is already symmetrical now for Jio. It is being made asymmetric by the other operators by keeping their 2G voice tariffs high," it said.

In response, Airtel claimed that the TRAI assumption for zero IUC charge from January 1, 2020 was based on the adoption of VoLTE and the growth of smaller sized operators. "Both these have not materialized," Airtel said.

The telecom industry, it said, is in a state of deep financial stress since the last three years with several operators having gone bankrupt and thousands of jobs having being lost. "The IUC is determined based on the cost per call. Given the massive 2G customer base in India the cost of the call at 6 paise is already significantly below the real cost of completing the call," it said.

When contacted, a senior TRAI official said that the Jio's charges of regulatory flip flop was "unfortunate", since the review is only at a discussion, not a decision stage. The official, who did not wish to be named, said that Jio is being "judgemental even before a judgement is pronounced".