Cracking down on incumbent operators’ efforts to block Reliance Jio subscribers from calling their customers, the Telecom Regulatory Authority of India has asked big GSM companies such as Bharti Airtel, Idea Cellular and Vodafone to provide connectivity to the new operator, according to sources.
Meanwhile, certain other industry sources said no final decision was arrived at today and the meeting was inconclusive. No official statement has been issued by any of the parties about today’s meeting.
The telecom regulator had called for a meeting of all the operators in the morning after repeated complaints from Reliance Jio that the big three operators were refusing to provide it with interconnect points despite being legally required to do so.
Stock prices of Bharti Airtel and Idea Cellular have fallen today, while those of Reliance Industries is trending up. RIL shares were up 1.3%, while those of Bharti Airtel were down 1%.
As we explained in our earlier story, all telecom operators in India are mandated by law not to block calls to their subscribers from customers of other operators.
The incumbents have been refusing to give more interconnection points to Reliance Jio saying that allowing Jio customers to make as many calls as they want will hit their profit levels.
Unlike big firms like Airtel, Vodafone and Idea, Reliance Jio gives voice calling facility free of charge to anyone who takes their data packs.
This has got the traditional companies worried, as they get 70-80% of their profits from voice calling.
Soon after the Mukesh Ambani firm announced that it would offer free calls to all its customers, the Cellular Operators’ Association of India — controlled by the incumbents — announced that its members will not give interconnection points.
It said doing so will bring down the average money that they generate from each call to 22-25 paise. At present, the big operators make around 32-34 paise per minute — based on an average of incoming and outgoing charges.
Typically, an incoming call generates only a revenue of 14 paise per minute, while an outgoing call generates about 55-60 paise per minute for these operators.
They are worried that allowing Jio subscribers to make a lot of calls will result in their own subscribers buying Jio connections, and then using these connections to make their voice calls.
However, the TRAI is understood to have read the law to the incumbent operators and told them to create more interconnection points.
Mukesh Ambani has, meanwhile, said that more interconnection points must be provided when the capacity utilization of existing points reach 70% — something he said happened some time back.
At present, Jio subscribers calling those on Airtel, Vodafone and Idea Cellular networks are greeted with the message ‘all lines in this route are busy’.