Telcos tell PMO: Not obliged to entertain Jio’s requests for interconnection points

By September 7th, 2016 AT 6:17 PM

The ongoing battle for interconnection points between Reliance Jio and India’s top telecom operators like Bharti Airtel, Vodafone India and Idea Cellular is set to escalate further even after the commercial launch of services by the Mukesh Ambani-led telco in India.

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Incumbent telecom operators have reportedly told the Prime Minister’s Office (PMO) “they are in no way obliged or in any position to entertain Reliance Jio Infocomm’s requests for interconnection points.”

The telcos through their industry body said Cellular Operators Association of India (COAI) said that they don’t have either the network or the financial resources to terminate Jio’s massive volumes of potentially asymmetric voice traffic.

COAI, in its letter to Nripendra Misra, principal secretary at PMO, which was assessed by ET, said that unloading tsunamis of asymmetric incoming voice traffic from a (potential) 100 million Reliance Jio customers can lead to the weighted average voice realisation of existing operators plunging from 30-40 paise per voice minute to 22-25 paise per voice minute or even lower.

COAI said that the incoming-to-outgoing traffic ratio in India is normally 1:1, but Jio’s beta tests had tended to veer it towards an asymmetric 10:1. The body said that this would undoubtedly lead it to a 15:1ratio once its potential 100 million subscribers grow accustomed to unlimited free voice service.

ET reported that COAI had sent this letter on September 2, a day after the Reliance Industries AGM where Mukesh Ambani announced Jio’s September 5 launch date.

Furthermore, the association has warned the present telecom companies will go into liquidation long before this reduced weighted average voice realisation is reached.

“Reliance Jio may well make up some part of this massive voice cross-subsidy by way of data revenue realisations, by way of customer acquisitions/churn, but it becomes abundantly clear that the overwhelming burden of this free lunch is sought to be passed on to rival operators through tariff manipulations, which exploit the Interconnect Usage Charge (IUC) regime, and offload tsunamis of asymmetric voice traffic that will choke and financially destroy competition,” Rajan Mathews, director general of the COAI said in the letter.

Reliance Industries Chairman Mukesh Ambani had earlier asked incumbent carriers to provide enough points of interconnection (PoI) so that Jio’s calls could go through smoothly.

Jio officially launched 4G services on September 5 with a disruptive welcome offer of free voice and data services till December 31.

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