Mukesh Ambani led telco Reliance Jio Infocomm has backed the Trai decision, whereby the regulator has decided to cut down the Interconnection Usage Charge (IUC). The telco says that this move will remove the “artificial tariff hurdle” and will be a good step towards the adoption of new technologies like VoLTE. In its annual report, Jio said that the IUC cut “…not only removes the artificial tariff hurdle with floor price but also allows faster adoption of more efficient technologies like VoLTE, as erstwhile legacy networks are nearing obsolescence.”
IUC is a charge paid to the telco on whose network the call is terminated. Under the decision by Telecom Regulatory Authority of India (Trai), the IUC was cut almost 57% to 6 paise per minute. This happened in October 2017, now Trai has ruled that the charge would be scrapped starting January 2020.
Other incumbent telcos, however, weren’t pleased by this decision of Trai. Idea Cellular, Bharti Airtel and Vodafone India were against the decision since many calls are terminated on their network in the country. These three telcos have around 60% of the total subscriber base. The three companies alleged that the regulator was favouring Reliance Jio and moved court, to challenge the decision and request alter move.
It is also noteworthy that Reliance Jio, which started its operations in the September 2016 was the first one to request the removal of the IUC charge. Jio also spoke its thought on the issue citing that before it entered into the market, digitisation and data consumption were “subdued, because of inadequate investment in infrastructure, lack of credible competitive environment coupled with steep pricing.”
Undoubtedly, Reliance Jio has brought a change in the Indian telecom scene and the numbers prove the same. Its wireless data traffic was pegged at 5.06 billion GB in the January-March quarter, which showed a 14% rise from the previous quarter. Bharti Airtel, on the other hand, recorded about 1.5 billion GB as its wireless data traffic. For Reliance Jio, the average monthly data consumption per user was 9.7 GB while average monthly voice traffic was 716 minutes per user. Airtel was also not far behind and recorded 670 minutes per user. Data usage per subscriber was 6.6 GB. The telco said that despite the industry’s contribution to GDP was meagre 6.5%, it had a “monolithic approach towards consumer with limited innovation or collaboration that drives eco-system benefits to the end consumer.”
Reliance Jio also plans to target the rural households which according to their consensus present a huge opportunity. The company said “The above gap represents an opportunity of at least 150 million households, which are yet to be connected,” they further stated that out of 906 million people living in rural India, about 750 million do not have access to the internet.
Jio also did not forget to add about its feature phone saying that it would bridge the digital gap by “reaching out to the bottom of the pyramid with several data-driven functionalities bundled into the devices.”
The operator also quoted that it is ready for 5G technology, which given its 68 patents and current infrastructure would require minimal capital expenditure on its network.
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.