Bharti Airtel Accuses Reliance Jio for Predatory Pricing, Demands IUC Correction

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Bharti Airtel has rejected Reliance Jio’s accusation that the ongoing financial stress is created by incumbents telcos, and further accused the 4G entrant of predatory pricing.

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Bharti Airtel, which met the inter-ministerial group (IMG) on Friday, during its presentation demanded that telecom service providers should have the right to retail customers through offers and discounts.

The telco told the IMG that the Mukesh Ambani-led telco is trying to win the market by adopting predatory pricing approach, which has severely hit the industry's revenue, net income and return on capital employed.

The Sunil Mittal-led telco reportedly sought a reduction in licence fee to 3 per cent and bringing SUC to uniform one percent rate.

Airtel also demanded relaxed spectrum payouts with a five-year moratorium, and lower GST rates for telecom services.

The telco in its presentation said that the industry requires an investment of Rs 2 lakh crore by 2020 for creating infrastructure for Digital India.

The country’s largest telco by subscribers and revenue also said that telcos be paid more for calls terminating on their networks, adding that the current call connects charges or IUC of 14 paise/minute is below cost and needs to be corrected.

Other incumbent telcos – Vodafone and Idea Cellular – also argued that Interconnection Usage Charges (IUC) need to be correctly determined to "prevent predatory voice pricing environment".

Airtel in its presentation to the IMG said, “To prevent abuse of below cost termination charges, it is recommended that the present IUC should be corrected and fixed at the full cost incurred by the terminating operator.

Idea separately said that Jio's free offerings had impacted the industry adversely. It suggested floor rate for both voice and data tariffs that it said would put a check on predatory pricing.

"Only solution is to have floor prices for voice, SMS and data services, so mobile telecom businesses generate adequate profit to invest and then compete based on the quality of service," Idea was quoted as saying by media reports.

The Aditya Birla Group company said that top four telcos have cumulatively lost Rs 8,200 crore of revenue in the second half of last fiscal as compared to the first half due to free offerings by Reliance Jio.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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