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Interconnect port: RJio plans to take older telcos to court

By Malini Bhupta
September 08, 2016 10:15 IST
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Trai calls both Jio and incumbents for a meeting to discuss the issue

Reliance Jio is likely to take incumbent telecom operators to court, as they are not granting it adequate interconnect bandwidth, even after the newcomer launched its services commercially on Monday.

The Telecom Regulatory Authority of India (Trai) has called both Jio and incumbents for a meeting to discuss the issue later this week.

Sources familiar with the developments indicated the matter could possibly end up in courts, as the situation is without precedent and Jio is pitted against the rest of the sector.

Big and small operators alike have refused to release any further interconnect bandwidth.

An email to RJio on this issue went unanswered.

In a letter to Reliance Jio on September 6, the department of telecommunications said: “As per Section 11 (l)(b)(ii)&(iii) of TRAI Act, 1997, the matter related to interconnectivity between service providers is within the purview of Trai. Further, as per provisions contained in the Unified Licence, the interconnection shall be subject to mutual agreement of the concerned parties and may be dealt with accordingly.”

Locking horns
8 August: Incumbents refuse to release interconnect bandwidth, accuse Jio of masquerading a full blown commercial launch as a trial
10 August: Reliance Jio accuses big incumbent operators of abusing dominant position
23 August: COAI writes to PMO saying Jio's "tests" causing revenue loss to govt
1 September: Reliance Industries chairman Mukesh Ambani announces commercial launch of Jio from 5 September, makes voice calling free
2 September: All incumbent operators come together and refuse to grant any further PoIs to Jio

Incumbent operators have so far refused to grant interconnect bandwidth to Jio, as the latter had expanded the scope of its trial to millions of subscribers.

Even though Mukesh Ambani, chairman, Reliance Industries, at the company’s annual general meeting last week announced that Jio’s services would be commercially launched from September 5, all operators have refused to release additional interconnect bandwidth to it.

Under licence conditions, incumbent operators are mandated by law to release points of interconnect (PoIs).

However, in this case, Jio has made voice calls free, which would lead to a disproportionate amount of traffic emanating from Jio’s network to that of other operators. Under normal circumstances, a new entrant would have built its subscriber base over a period of time.

But, by continuing with free services for a prolonged period of time even after a commercial launch, the matter has become complicated.

Even though Jio is not charging the consumer anything for voice calls, it is paying 14 paise per minute in termination charges.

A senior officer with a telecom service provider said: “Given this situation of a purported test that has now been called a commercial launch with free calls being allowed is a very difficult situation.”

All operators, other than Jio, have come together on this issue. It might be difficult even for Trai to intervene in the matter as such a situation is unprecedented.

In a letter written to the Prime Minister’s Office, the Cellular Operators Association of India (COAI) said in its letter on 2 September that Reliance Jio “will not only fully subsidise all their own direct and indirect costs, they will also additionally pay from their pocket the 14 paise per minute mobile termination charges to terminating operators so that unlimited voice will be free to their consumers forever.”

If voice is given free, COAI has argued, free calls would lead to industrial use. Operators have said the tsunami of asymmetric voice traffic originating from Jio’s network will choke and financially destroy competition.

Jio announced till December 31 this year, customers will not be charged for data or voice. This would lead to traffic getting skewed with more calls emanating from Jio's network to that of incumbents. Such a situation would lead to choking of networks of incumbents.

While incumbents are being paid the 14 paise termination charge, incumbent operators contend that interconnect charges were designed keeping in mind proportionate exchange of traffic between operators and adding more interconnects will degrade their own networks.

Photograph: Krishnendu Halder/Reuters

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Malini Bhupta in Mumbai
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