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Ambani brothers unite against Jio's rivals

  • The Ambani's are refusing to pay interconnection charges
  • Rivals  Airtel, Idea and Vodafone maintain it is needed to encourage investments



ambani brothers unite
First Published Oct 19, 2016, 10:09 AM IST


Sharp differences have emerged among telecom operators over call termination charges with Ambani brothers opposing the levy, while rivals Bharti Airtel, Idea Cellular and Vodafone maintained it is needed to encourage investments mainly in rural areas.



In response to Telecom Regulatory Authority of India's (Trai) consultation paper on review of interconnection usage charges, Mukesh Ambani-led Reliance Jio, Anil Ambani-promoted RCom and Videocon have asked the regulator to abolish call termination charge, arguing that it makes phone call rates expensive for consumers and advent of new technologies are reducing cost of operations. 



"Continuance of IUC, which is only a subsidy for inefficient network, will prevent operators from moving to the newer technologies besides keeping the cost of service at a very high level which only results in higher cost to the consumer," Reliance Jio said in its submission.


On the other hand, dominant players -- Sunil Bharti Mittal-led Bharti Airtel, Aditya Birla group firm Idea and Indian arm of British telecom major Vodafone have favoured levying of call termination charge to encourage investments in the country specially rural area where people spend less. 



"We support a cost-based termination charge, enabling all TSPs to recover the legitimate cost of the termination of a call on their network from other operators. Such a regime is essential to protect and increase network investments," Airtel said.



Interconnection is must among telecom networks for transmitting phone calls from one network to other. At present interconnection charges (IUC) are paid by one telecom operator to another for connecting call made by its subscriber to dialled number. These charges add up to determine phone call rates. IUC is determined based on the cost incurred by telecom operators in transmitting a call.



At present, the termination charges for a mobile to mobile local and national long distance call is pegged at 14 paise per minute while the termination charges for international incoming call to wireless and wireline stands at 53 paise per minute. "Any change from a cost based regime will adversely impact our huge investments in the rural areas and belie the promise of cost based approach on the basis of which these investments have been made," Vodafone said.

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