Reliance Jio may acquire a VoIP license, says Bank of America Merill Lynch

According to a research note released by Bank of America Merill Lynch (BofA-ML), the corporate and investment banking division of Bank of America, there are possibilities for Reliance Jio to acquire a VoIP license. However, the operator may not offer free VoIP calls through its service.

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“Given R-Jio’s lack of traditional voice offering and considering that its Vo-LTE (4G) offering may not be mature immediately, we see a possibility that Jio may look to acquire a VoIP license,” said BofA-ML said. “In such a scenario, we do not see the possibility of free VoIP calls being offered,” it added.

BofA-ML also said that DoT’s proposal on regulating domestic calls on internet-based apps like Skype, Whatsapp, Viber etc. may prove slightly beneficial for the existing telecom operators like Airtel and Idea, “as cannibalization of voice revenues from VOIP uptake will likely be slower,” it said.

Also, OTT players like Skype, Whatsapp and Viber may not opt for OTT license as these companies are not telecom players. “They may not make an exception for one country,” said BofA-ML.

“However, the home grown OTTs like Jio chat/Hike may possibly opt to take the license which may allow them to gain traction in the messaging space which is currently dominated by foreign OTT players,” it added.

The research note commented that the traffic created by VoIP will be difficult to monitor. “VoIP traffic (whether it is domestic or international) is difficult to monitor, and the arbitrage opportunity between international VOIP and domestic VOIP may lead to increase in illegal VOIP traffic,” BofA-ML added.

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