Reliance Jio has decided to charge customers 6 paise per minute for every call they make to a rival’s network. This is the first time Reliance Jio will charge users for voice calls.
Reliance Jio on Wednesday said it will charge its users 6 paise per minute on calls made to rival networks such as Airtel and Vodafone. Reliance Jio said it will compensate users by giving free data of equal value until TRAI completely abolishes interconnect usage (IUC) charges.
Reliance Jio said it had paid nearly Rs 13,500 crore as NET IUC charges to other operators in last three years. “The price differential of free voice on Jio network and exorbitantly high tariffs on 2G networks causes the 35 – 40 crore 2G customers of Airtel and Vodafone-Idea to give missed calls to Jio customers. Jio network receives 25 to 30 crore missed calls on a daily basis,” the company said in a statement
“This huge missed call phenomena converts the incoming calls to Jio into outgoing calls from Jio to other operators. The 25 to 30 crore missed calls per day should have resulted in 65 to 75 crore minutes of incoming traffic to Jio. Instead, the call back made by the Jio customers results in 65 to 75 crore minutes of outgoing traffic,” it added.
Reliance Jio said the 6 paise per minute tariff will not be applicable to Jio-to-Jio calls, all incoming calls, Jio to landline calls, and calls made using apps like WhatsApp or FaceTime. The company will provide priority allocation of the JioPhone to frequently called 2G users from its Jio subscribers. To compensate users, Reliance Jio has introduced IUC top-up vouchers with additional minutes and more bundled data.
TRAI in 2017 had dropped the IUC charges to 6 paise per minute from 14 paise. The regulator had then aimed to abolish IUC by January, 2020. TRAI, however, introduced a new consultation paper to review whether the regime timeline needs to be extended.
Tech policy and media consultant Prasanto K Roy said, “Reliance had placed its bets on TRAI’s continued support to Jio against the incumbents: TRAI was set to go ahead and dropping the IUC to zero, which would have been a continued bonanza on top of the earlier drop to 6 paise. Keep in mind that the drop benefitted Jio and hurt the incumbents further. The Oct 2017 drop had benefitted Jio tremendously, and hurt Airtel/Vodafone, given that most calls from Jio would have been to Airtel/Vodafone in the initial years.”
“Now, it’s good to know that TRAI has decided to be fair and float a consultation paper to review whether the regime timeline needs to be extended. Having said that, the impact on Jio is not as much as it would have been in the past, given that a lot more calls today will be within Jio, and this could in fact further drive “friends and family” to move to Jio. I am a little surprised that Jio has decided to pass this 6 paise on to subscribers, but it is only fair to do so else it would end up being a subsidy. In any case, they are going to compensate with an equivalent value data – sort of like a slightly increased cover charge in a restaurant,” he added.
Faisal Kawoosa, Founder and Chief Analyst, techARC, said, “The main challenge with Jio is IUC. With the kind of revenue model they forayed, they would end up paying competition. With this charge they would ensure the IUC is now on consumers.”