Jio vs Airtel

A new update in the telecom sector has come from Airtel, which says it is losing Rs 550 crore per quarter due to calls from Reliance Jio’s Network. The statement came after an open house held by Telecom Regulatory Authority Of India (TRAI) today regarding interconnection usage charges (IUC) where Reliance Jio proposed to make IUC zero. In response, Airtel sent out a release saying that Reliance Jio is trying to establish a monopoly, throttling competition by proposing zero IUC.

By proposing a transition to the ‘Bill and Keep’ regime with zero MTC, Reliance Jio wants to simply transfer its cost to Airtel and other operators, said Airtel. Due to this, the other operators will have to bear costs ranging between Rs. 15,000 to Rs. 20,000 crores per year.

“Such cost will help Reliance Jio in using their capital to offer packages at a lower price that will create industry competition by creating a monopoly”.

Reliance Jio in a statement said that Airtel is earning excessive amount from Mobile Termination Charges (MTC), and the two established operators had recovered an amount of nearly Rs 1,20,000 crore. Airtel did not confirm on any of these claims and said these allegations are laughable.

In 2015, TRAI mandated MTC of 14 paise per minute from 30 paise to 20 paise per minute back in 2009. Airtel claims that the costs of producing a minute are around 35 paisa.

The company also confirmed that it is losing 21 paise for every minute due to numerous calls originating from Reliance on the network, leading to a loss of Rs. 550 crore per quarter.

Other operators like Airtel, Idea, and Vodafone are against Reliance Jio’s proposal of making IUC zero. The operators are demanding IUC to be raised to 30 – 40 paise per minute from 14 paise per minute. TRAI said that it has taken this request into consideration and will review the charges soon.