Info-tech

IUC subsidising incumbent operators: Reliance Jio

| | Updated on: Sep 14, 2017
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“With ongoing migration of all networks to IP-based networks and voice consuming minuscule resources in the data world, the concept of IUC settlement has been rendered meaningless.”

The war of letters between Airtel and Reliance Jio over interconnect usage charges (IUC) intensified with the latter charging the former of making malicious and unfounded representation.

In a fresh letter to TRAI, Reliance Jio said that interconnection charges subsidised incumbent operators and disincentivised new players. “IUC is nothing but a subsidy for the incumbent dominant operators and has acted as disincentive for investment in new technologies. With ongoing migration of all networks to IP-based networks and voice consuming minuscule resources in the data world, the concept of IUC settlement has been rendered meaningless. We need to migrate to this imminent change which will benefit not only the customers but will also be in the larger interest of the overall industry,” RJio said.

Dismissing Airtel’s stand, RJIo said that “Airtel in its financial statements for the purpose of accounting for revenue earned/ accrued from IUC payments made by other operators, does so on gross minutes of usage (MoU) basis. RJIL has used the same understanding to estimate IUC earned/ excess recovery made, based on gross MoU. Therefore, as RJIL’s calculations were done using the principles that are followed not only by Airtel but are also universally accepted, Airtel’s objection in this case is bewildering.”

“Secondly, Airtel is deliberately acting ignorant and maintaining silence on the fact that its pay-out towards IUC is recovered by it from its customers, as evident from its retail voice tariffs. Airtel’s outgoing tariffs for off-net calls, irrespective of its net IUC pay-out for off-net traffic, clearly shows a premium that it charges from its customers to compensate for the IUC that it would need to pay to other operators,” RJio added.

The new operator said that Airtel does not charge the same amount for on-net and off-net calls, and thereby recovers a premium for off-net calls. “We, therefore, request that for the sake of transparency, Airtel should be asked to make public disclosure of the excess recovery made due to this artificial tariff differential between off-net and on-net call tariffs.”

Published on January 10, 2018

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