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Reliance Jio makes all domestic voice calls free from Jan. 1

Reliance Jio Infocomm Ltd. made domestic calls to other operators free, a day before the telecom regulator is set to abolish the interconnect user fee.

“Honouring its commitment to revert off-net domestic voice call charges to zero as soon as IUC (interconnect user charges) are abolished, Jio will once again make all off-net domestic voice calls free, starting Jan. 1, 2021,” the Mukesh Ambani-owned carrier said in a statement. “On-net domestic voice calls have always been free on the Jio network.”

Operators pay IUC of 6 paise a minute every time their subscriber calls up a user on the rival network. Reliance Jio initially was a net payer as it offered voices services free and urged the regulator to abolish the fee even as incumbent carriers wanted the zero-IUC regime delayed. After the Telecom Regulatory Authority of India deferred it by a year, Reliance Jio started charging for its voice calls starting October 2019 citing recovery of IUC charges. The company, however, had promised to stop charging IUC once it’s abolished by TRAI.

Reliance Jio in December 2019 had introduced ‘All-In-One’ plans, priced 40% higher that its previous plans. Those offered unlimited Jio-to-Jio calling but calls to other networks were capped at 300 or 12,000 minutes depending on the plan, which had in-built IUC charges.

While a free call would mean the limits on the minutes will go away, the prices will remain unchanged. This implies that the in-built IUC in the plan will get absorbed in the tariff. The average revenue per user of Reliance Jio was Rs 145 in the quarter ended September, up 14% year-on-year. That compares with Bharti Airtel Ltd.’s ARPU of Rs 162 in the second quarter, a rise of 27% over the year earlier.

Reliance Jio’s cheapest plan of 2GB for 28 days starts at Rs 129, a 13% discount to rivals. Among other popular prepaid plans are 1GB per day at Rs 149 for 24 days, 1.5GB/day at Rs 199 for 28 days, and 1.5GB/day at Rs 555 for 84 days.

To be sure, Reliance Jio now is a net earner of IUC, and abolishing the fee is likely to hurt its revenue and margin. Bharti Airtel and Vodafone Idea Ltd., on the other hand, are will benefit as they turned net payers last year. BloombergQuint

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