NEW DELHI: India’s telecom regulator is set to reject claims by Bharti AirtelBSE -0.49 %, Vodafone India and Idea CellularBSE -0.11 % that calls can’t be priced at less than 14 paise per minute, a senior official said, pointing out that they too offer voice services below this rate.
A senior official at the Telecom Regulatory Authority of India, who asked not to be identified, said the watchdog would respond this week to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), likely reiterating that Reliance Jio’s free offers didn’t violate any rules. It may also underline that the interconnect usage charge of 14 paise a minute can’t be taken as the retail floor price.
Citing the claims as a classic example of the pot calling the kettle black, the official said the country’s three largest telcos were already pricing voice calls lower than 14 paise, the interconnect charge, and if that wasn’t predatory, “then how come the telcos are crying foul now?”
“Free night calling and bundled packs offering unlimited calls are all examples of incumbent telcos doing the same,” said the official.
The operators have contested the regulator’s decision to allow rival newcomer Reliance Jio to provide free voice and data services under two back-to-back promotional offers at TDSAT and the Delhi High Court. The tribunal gave the regulator until March end to revert with its decision on the matter. Jio is set to charge for data services from April 1, while continuing with free calls.
Jio’s free offers hit the profit of telcos, which claim the interconnect charge of 14 paise a minute acts as the floor for retail prices and offers below that are predatory.
The interconnect usage charge of 14 paise per minute is paid by the operator of the network where a call originates to the recipient network.
Trai has cleared Jio
The regulator lowered the termination charge to 14 paise a minute from 20 paise in 2015, a move that’s been challenged in court by Airtel, Vodafone and Idea, the top three GSM carriers. In a discussion paper on interconnect usage charges issued in October, Trai suggested lowering or even scrapping the call termination charge, a proposal that operators decried, accusing it of bias.
Less than six months after starting services, Jio notched up 100 million subscribers, the company said in February.
The telcos have also complained to the Competition Commission of India, the anti-monopoly watchdog, accusing Jio of predatory pricing. Jio has denied the charges.
Trai has cleared Jio, which started commercial services on September 5, of any wrongdoing, terming its free voice and data offers non-predatory. The regulator hadn’t previously stated the reasons publicly, but the Trai official said they have been explained to the complaining carriers.
The Telecom Commission, the highest decision-making body in the Department of Telecommunications, had written to Trai, complaining that Jio’s promotional offers had affected the sector, indicated by a fall in revenue for the government in the October-December quarter.
Trai dismissed the commission’s concerns, saying that the revenue drop was simply a function of competition in the industry and that the government’s revenue couldn’t be used as the only yardstick to measure the health of the telecom sector. Benefits to consumers and other factors should also be considered.
The operators have alleged foul play in allowing Jio to extend its ‘Welcome Offer’ beyond the 90-day period specified by the regulator. They said Jio’s second offer, which started on January 1, was an extension of the first.
The regulator dismissed the accusations on the grounds that the tariff framework doesn’t explicitly bar back-to-back promotional offers and Jio’s offers didn’t fit the definition of predatory pricing.