Reliance Jio again backs TRAI move to slash IUC

MUMBAI: Reliance Jio Infocomm reiterated its backing for the regulator’s decision to slash the interconnection usage charge (IUC), saying it removes an “artificial tariff hurdle” and will lead to quicker adoption of advanced technologies like Voice over LTE (VoLTE).

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,” the Mukesh Ambani-owned telecom company in its annual report.

The Telecom Regulatory Authority of India slashed IUC — a charge paid to the telco on whose network a call terminates — by about 57% to 6 paise a minute starting from October 2017 and decided to scrap the charge from January 1, 2020.

The decision was opposed by Bharti Airtel, Vodafone India and Idea Cellular, India’s biggest operators. They have over 60% of the country’s mobile subscribers and benefit from a higher IUC because more calls and messages terminate on their networks. The three companies alleged the regulator favoured Jio and have moved court, challenging the decision to lower IUC.

Jio, which started services in September 2016 with an all-India 4G network, offers free calls and data at low rates. It is a net payer of the charge and had pushed for complete removal of IUC on voice calls.

Taking further pot shots at its competitors, Jio said digitisation and data consumption before its entry were “subdued, because of inadequate investment in infrastructure, lack of credible competitive environment coupled with steep pricing.”

Jio has attracted heavy data traffic since it started services. Its wireless data traffic was 5.06 billion GB in the January-March quarter, up 14% from the previous quarter. Comparatively, Bharti Airtel recorded about 1.5 billion GB. Average monthly data consumption per user was 9.7 GB for Jio, while average monthly voice traffic was 716 minutes per user. Airtel, in comparison, recorded 670 minutes per user, while data usage per subscriber was 6.6 GB. The telco said in its report that although the industry’s contribution to GDP was 6.5%, it hitherto had a “monolithic approach towards consumer with limited innovation or collaboration that drives eco-system benefits to the end consumer.”

The operator has 68 patent filings and said it is ready for 5G technology, which would require minimal capital expenditure on its network.

Jio highlighted the rural markets as an opportunity, with most internet access skewed largely in favour of urban India. Of 906 million people living in rural India, about 750 million do not have access to internet, the company said.

“The above gap represents an opportunity of at least 150 million households, which are yet to be connected,” it said.

Jio added that its “smart feature phones,” marketed by Reliance Retail, will bridge the digital gap by “reaching out to the bottom of the pyramid with several data-driven functionalities bundled into the devices.