India's established or 'incumbent' telcom operators have fired their first direct salvo at Reliance Jio Infocomm, asking the department of telecommunications (DoT) to immediately ask the Mukesh Ambani-led company to snap all connections provided to 1.5 million users as it was bypassing regulations by offering full-fledged services in the guise of test connections.
In a letter to telecom secretary J S Deepak dated 8 August, as reported by The Times of India, telecom lobby group Cellular Operators Association of India (COAI) said present licence conditions do not provide for testing or trials of free voice and data services for such large numbers and that Jio was offering full fledged services.
"This is no test. This is the provisioning of full-blown and full-fledged services masquerading as tests, which bypass regulations and can potentially game policy features like the IUC (interconnection usage charge) regime, non-predatory pricing, fair competition etc," Rajan Mathews, director general of COAI, which represents top telcos including Bharti Airtel, Vodafone India and Idea Cellular, said in the letter.
Jio is also a member of COAI. The company didn't respond to emailed requests by ToI for comment on the COAI letter.
The COAI letter to the telecom secretary comes in the run-up to an expected launch of Jio's commercial services this month. Jio has officially said that its free voice and data services are currently being used by around 1.5 million users under a test phase which will be upgraded into full-blown commercial services in the coming months. Jio is currently running trials on 20 models of its own LYF smartphones as well as 14 Samsung smartphones.
Consumers who have bought these phones are being offered three months of unlimited data and voice, free of charge. The offer initially began with Reliance Industries employees and was subsequently extended to retail consumers. Existing telcos say all current Jio services need to be stopped.
"In order to ensure compliance to licence conditions and the Trai regulations and guidelines, we request your (DoT) urgent intervention in this matter and instruct the said licensee to stop such practices. Further, they should be instructed to immediately disconnect all such connections provided to general public under the guise of test connections," COAI said.
It added that the situation was unprecedented, as neither information about tariffs, even if they're zero, had been given to the telecom regulator for approval, nor the customer acquisition forms that are allegedly being collected have been given for auditing. "(Jio) has also tried to port subscribers from other operators, even though this isa pre-launch test period," COAI said in the letter.
While Jio and the incumbents have been at loggerheads ever since the Mukesh Ambani-owned company announced its intent to re-enter mobile phone services back in 2010, they till now stayed away from naming the other party directly. But the latest letter marks a departure from this policy. The parties have been on the opposite side of the fence on multiple policy issues such as spectrum usage charges and call termination charges, or interconnect charges (IUC).
IUC is a charge that a telco receiving a call is paid by one on whose network the call originates.
COAI on Monday also accused the telecom regulator of taking a host of "biased policy decisions" aimed at hurting them and serving the interests of new players (See: Incumbent operators may take Trai to court over 'favouritism').
Reliance Jio's impending launch has already led to the incumbent telcos slashing effective data tariffs by about 67 per cent for pre-paid customers.
Airtel has already started offering free and unlimited voice calls in some of its data packs. Reliance Industries has said the average monthly data consumption on the Jio network is in excess of 26 GB per user, while average voice usage is more than 355 minutes. Market leader Airtel reported an average voice usage of 414 minutes per user in the quarter ended June 30.
"Tha traffic imbalance is evidently due to the free offer whereby existing operators are inflicted with traffic volumes which are not adequately compensated by the IUC," COAI said. COAI added that the volume of voice traffic generated was choking points of interconnect and in turn impairing service quality of other operators whose have tariff paying subscribers.