Reliance Jio’s Push To Scrap Call Connect Charges Will Kill The Industry, Says Bharti Airtel

India’s largest telecom operator Bharti Airtel Ltd. said its newest rival Reliance Infocomm Jio Ltd. was trying to create a monopoly by suggesting to scrap charges they pay for cross-operator calls.

The 'bill and keep' regime that Reliance Jio has proposed to abolish the mobile termination charges would cost the telecom industry Rs 15,000-20,000 crore every year and will only increase going forward, an emailed statement by Bharti Airtel said. Such a transfer of costs would allow Reliance Jio to price services in a predatory manner to monopolise and “kill the industry”, it said. Mukesh Ambani-led Reliance Jio’s allegations that its rivals earn excess revenue are “not only false but laughable”, the statement said.

Also Read: Rivals Made Rs 1.2 Lakh Crore From Interconnection Usage Charges, Reliance Jio Says

When a call is placed from Bharti Airtel’s network to Jio’s, the Sunil Bharti Mittal-led operator has to pay 14 paisa for every minute the call lasts, and vice versa. Jio’s rivals with a much larger subscriber base and better rural penetration see higher incoming traffic, making them net earners of such revenue, according to a report by Kotak Securities.

The Ambani-led operator disrupted the industry by offering free services for the first six months, triggering a tariff war. Reliance Jio didn’t pay any termination charges during the period as its services were in a trail phase. However, the charges will be applicable since April when it started charging its subscribers.

In its proposal to the telecom regulator, Reliance Jio said two of the established operators had made “excess recovery” of Rs 1.2 lakh crore from mobile termination charges. The three largest players – Bharti Airtel, Vodafone India Ltd. and Idea Cellular Ltd. – had earlier sought two-fold jump in call connect charges, saying that terminating incoming calls on their networks costs twice the 14 paise per minute mandated by the regulator.

Airtel said that it already loses 21 paisa every minute due to the “tsunami of calls” from Reliance Jio's network. “This has resulted in a loss of Rs 550 crore per quarter for Airtel alone,” it said.

Under the bill and keep regime Reliance Jio is pushing for, operators only keep record of incoming calls on their network but don't raise any demand from rivals. Each network agrees to terminate calls from the other at no charge

Jio simply wants to transfer its own costs to other operators, Bharti Airtel said.

The bill and keep regime would burden other operators and make them weak, Gandhi said. This is the “sinister design” of Reliance Jio, he added.