Reliance Jio Says VoLTE Is the Reason for Its Lower Network Costs, Not Accounting Practices

When the issue of Interconnect Usage Charges (IUC) came up, the Sunil Bharti Mittal led telecom operator, Bharti Airtel alleged that the network cost incurred by Reliance Jio is lower because of its different accounting practices. Now in a new update, as reported by ET Telecom, Reliance Jio has rejected the allegation saying that the network costs are lower for the telco because of the technology that it uses and not because of the accounting practices. The telecom operator also added that the cost differential is because of the network technology which the Mukesh Ambani led telco has deployed, and it also added that the two issues remain separate and have no forbearing to each other.

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Reliance Jio Accounting Practices in Crosshair

A senior Reliance Jio executive remarked on this issue, “Accounting standards have nothing to do with the cost of carrying a voice call…Jio follows Indian accounting standards. It’s a blatant lie to say it does its accounting in any different way.” In its statements, Bharti Airtel had alleged that Reliance Jio follows totally different accounting practices which are off the standards followed by the telecom operators worldwide. While the other telcos follow a uniform accounting standard, Reliance Jio follows a totally different accounting method altogether. The Airtel executive begged to differ as he said that the other telcos use a simple, straightforward and well-established method of accounting to calculate what cost is capitalised in the balance sheet and what goes towards P&L.

Reliance Jio Says VoLTE Technology is the Reason for Lower Costs

Reliance Jio had different views on the matter, as per Reliance Jio it has been “demonstrated to all authorities that cost of carrying a voice call on an IP network is close to nil at 0.05 paise a minute,” for the telecom operator. Reliance Jio also said that this is because of the 4G VoLTE technology which it has deployed across the country. The telco also added that the other telecom operators have not upgraded their IP technology and are charging their 2G and 3G customers up to Rs 1.5 per minute for voice calls which is what cost them more as compared to Reliance Jio. When posed with questions, Airtel executive declined to comment.