Jio attacks TRAI's IUC review; says move harms user interest, rewards inefficient telcos

Stung by sudden change in stand of the telecom regulator on charges for terminating phone calls, billionaire Mukesh Ambani's Jio ?has slammed Trai for "retrograde" step to continue "windfall" gains for old operators such as Airtel, saying it was punishing the efficient telecom operators and harming consumer interest.

The TRAI move to reopen the deadline for ending charges for terminating calls on rival networks beyond January 2020 had forced Jio to levy a 6 paisa per minute charge on its users last week, effectively ending its free call regime for life.

The "unwarranted exercise" which is an "act of utter haste" and inconsistent with TRAI's past approach and decision, does not even deal with the issue of whether termination charge from January 1, 2020 should be 6 paisa or less, but merely with the question of deferment of the deadline keeping the termination charge intact at 6 paise per min "which would be wholly irrational", Jio said in a 14-page letter to TRAI.

 

Jio alleged that any deferment of sunset clause for inter-operator termination charges will end up rewarding "designed defaulters" or telcos who have deliberately stayed away from new and efficient technologies.

Jio said the latest consultation paper does not disclose any imminent need for the proposed review and reflects a premeditated mind. Jio has further charged that consultation Paper by Telecom Regulatory Authority of India (TRAI) relies on "incorrect data" to draw its conclusions. Jio said TRAI's discussion paper is incomplete, and vitiated with "arbitrariness" and "non-application of mind".

"At a time when the situation is ideal to implement the Bill and Keep regime (meaning zero termination charge) from January 1, 2020, this retrograde step manifested in the form of the present Consultation Paper is neither warranted nor sustainable...," Jio said.

Typically, a telecom operator pays for completing calls made by its subscribers to a rival network. This is done by paying the rival network an interconnect usage charge (IUC), which currently is 6 paise per minute.

TRAI had in 2017 proposed to eliminate IUC from January 2020, but is now reviewing the timeline. Jio recently cited regulatory uncertainty and announced it will charge customers 6 paise per minute for voice calls made to rival phone networks.

"As a sequence of these misconceived actions, pro-consumer operators like RJIL (Reliance Jio), who have adopted the latest technologies are now required to revisit their tariffs and charge customers for voice services and such a step will be against consumer/public interest," Jio said.

Any regulatory intervention at this stage that envisages continuance of IUC will benefit the incumbents and cause irreparable hardship to Jio, the letter said.

Jio said its vast network had created innumerable opportunities for consumers and businesses in India and catapulted the country to among the top-ten nations globally in mobile broadband internet access. TRAI's consultation seeks to "stifle the growth of the industry" in addition to being against consumer and public interest, it alleged.

Punching holes in TRAI's consultation paper and data, Jio said the paper fails to note that the legacy operators have already recovered manifold the incremental network cost for voice calls on their 2G / 3G networks over the last 14 years through IUC (interconnect usage charges) and no new investments have been made for voice services for the last 5-6 years.

Without naming Airtel and Vodafone Idea, Jio argued that TRAI's paper "conveniently ignores" that the two private operators supporting the extension of IUC have made it compulsory for its subscribers to get minimum prepaid recharges of Rs 24/month in order to receive incoming calls.

"This also evidences that the incumbents are disguising their tariffs, and are already charging heavily, even for incoming calls," it said.

While framing the call connect rules in 2017 despite admitting to merit in moving to the Bill and Keep (BAK) regime right away, TRAI gave the legacy networks two years to migrate to new technologies, and it is now seeking to ignore their inefficiencies and lack of willingness to shift to new technologies, Jio said.

TRAI's consultation paper "seeks to subsidise their inefficiencies and absolute lack of willingness to move to new and more efficient technologies at the cost of consumer interest, thereby allowing the legacy operators to make windfall gains under the IUC regime," Jio said.

Even according to TRAI, from its report made to the Supreme Court on October 29, 2011, the introduction of Bill and Keep (BAK) had nothing to do with migrating to newer technologies, per se.

"The consultation paper appears to be prima facie premeditated and seems to have been issued without detailed analysis and lacks any rigour whatsoever," it said.

TRAI's move disincentivises technological progress and rewards designed defaulters, Jio alleged.

Jio further said that any deferment of sunset clause for call connect charges will end up rewarding "designed defaulters" who have deliberately delayed migrating to new and efficient technologies. Nothing prevented incumbent operators from switching their networks to efficient VOLTE (Voice over Long-Term Evolution) all this while, Jio argued.

Jio has questioned TRAI's jurisdiction and reasons to tinker with the original schedule for implementation of zero termination charge regime from January 1, 2020.

Jio accused other private operators of not moving to new technologies simply because they "will stop receiving termination charges."

TRAI's review acts as an "active inducement and promotes designed defaulters and acts as a punishment to those operators who have aligned themselves with the required technology with an endeavour to deliver the best service and at a low price to their subscribers", it said.