Disadvantage Jio — Airtel And Vodafone Idea Will Continue To Charge For Calls On Their Network

Reliance Jio is going to continue being the ‘ second SIM of choice (https://www.businessinsider.in/mukesh-ambanis-jio- faces-backlash-for-tariff-increase/articleshow/71573757.cms)’ as the Telecom Regulatory Authority of India (TRAI) decides to defer the elimination of interconnect usage charges (IUC) for another year.

One of the ways that telecom operators generate revenue is by collecting IUC. It basically means that the network where the call originates has to pay the network of the call destination a small toll of using the latter’s bandwidth.

Reliance Jio gets the short end of the stick with more than half the calls on its network — 64% — going off-network, according to an India Ratings (https://www.businessinsider.in/mukesh- ambanis-jio-faces-backlash-for-tariff- increase/articleshow/71573757.cms) report. Whereas Vodafone- Idea and Airtel subscribers only call off-network 41% and 45% of the time.

Why calls are no longer unlimited on Reliance Jio

The disbalance ends up making Jio the net payer of expenses, while its competitors end up being the net receivers. It’s also why Airtel and Vodafone-Idea can afford to offer free unlimited calling. Reliance Jio (https://www.businessinsider.in/reliance-jio-airtel-and- vodafone-idea-charges-for-outgoing-calls-to-other- networks/articleshow/72440347.cms), on the other hand, has to limit the number of free IUC minutes it can offer its customers.

Good news for Airtel and Vodafone-Idea

The decision to let the telecom industry collect IUC means that Airtel and Vodafone-Idea will continue to earn 6 paise per minute for calls on their network until 1 January 2021. The influx of revenue will provide some relief for the operators who first had to face Jio’s tariff war on data and then the S upreme Court judgement (https://www.businessinsider.in/reliance- industries-jio-stock-prices-shoots-up-after-supreme-court- verdict/articleshow/71737746.cms) on adjusted gross revenue (AGR).

The Department of Telecommunication (DoT) is reportedly also looking into pending license fees (https://www.businessinsider.in/reliance-jio-airtel-and- vodafone-idea-face-more-financial- burden/articleshow/72513282.cms) under the expanded of AGR that Airtel may owe for the telecom companies it acquired — Videocon Communications and Aircel. – Business Insider