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Trai to mediate as Reliance Jio-incumbents spat hots up

09 September 2016

With the antagonists on both sides of the latest telecom battle maintaining their positions, the Telecom Regulatory Authority of India (Trai) will play the referee by summoning the three major established or 'incumbent' telecom operators Airtel, Vodafone and Idea Cellular for a meeting today to discuss issues raised by them in their correspondence to it.

Billionaire Mukesh Ambani-owned Reliance Jio Infocomm Ltd's promotional offer of 4G voice and data services has set off a dispute over points of interconnection (PoI), where calls between two carriers connect, and termination charge or interconnection user charge (IUC) paid to by caller operator to the operator on whose network a call is received.

 The matter has reached the highest echelons of government with incumbent players already having written twice to the Prime Minister's Office (PMO) to apprise it of the issue.

Reliance Jio has also raised the issue of PoI with telecom reglator Trai, which has stepped in to resolve it after the Department of Telecommunications (DoT) refused to intervene. (See: DoT spurns Jio plaint on interconnectivity; refers it to Trai). The industry body Cellular Operators Authority of India (COAI), whose three major members have been called for discussion by telecom regulator, wrote to Trai secretary Sudhir Gupta on Thursday that other members should also be invited for discussion as "the issue pertains to all members of COAI".

"It is learned that Trai has scheduled a meeting on 9.9.2016 in this regard (interconnection and augmentation of PoIs with Reliance Jio) wherein Airtel, Idea and Vodafone have been called to discuss. We believe that the issue pertains to all members of COAI and not limited to the three operators. We therefore request to invite all members of COAI for the meeting," said the letter to the telecom regulator.

Still reeling under the impact of Reliance Jio's announcement last week of aggressive pricing for is 4G LTE services and its ambitious plans to swiftly scale up, the industry body has shot off letters to PMO's principal secretary Nripendra Misra and department of telecom (DoT) secretary J S Deepak.

In a letter written to the PMO, the COAI has voiced its concern over "induced asymmetry and abnormality of terminating traffic" that have threatened its survival. The letter notes that Reliance Jio's free voice would create "humungous volume of voice minutes" that could collapse their networks.

"In India, as in the world, incoming  - outgoing traffic ratio is normatively about 1:1. Once Reliance Jio marches beyond its 100 million subscribers, and as such subscribers become accustomed to the unlimited free service, the ratio will undoubted head towards 15:1. So, in a very short time, other operators will have to handle voice traffic which is double their present traffic. Of course, this is fanciful, because networks would have collapsed earlier," the industry association cautioned the PMO.

In the same letter, COAI says any attempt to reduce or scrap the IUC would also affect realisation of incumbents and could take them to the brink of liquidation. They called on the PMO to "intervene" and "restore fair competition".

"Our member operators welcome the entry of Reliance Jio in the market but will stoutly guard their right to fair competition," the industry lobby stated in the letter even as it said its member were in no "position" to terminate volume of traffic from Reliance Jio, which it felt was "markedly asymmetric".

"Neither are they (incumbents) obliged to entertain interconnect requests which are derived from abnormally induced traffic patterns that the game IUC regime and are anti-competitive," said the letter to the PMO.

Another correspondence to the DoT secretary, written on Tuesday, raked up the issue of the nature of Reliance Jio's 4G LTE services currently being offered in the market.

The industry body on Thursday also issued a statement refuting Ambani's claim in an interview to  a leading financial daily that association did not operate democratically.

"The comments made (by Mukesh Ambani) with reference to the functioning of COAI are absolutely incorrect and misleading. COAI is a fully a democratic association and takes into account the views of all its member operators. On all policy matters, the views of COAI are fully endorsed by all or majority of its member operators," said its note.

It said the industry body's views on IUC captured the views of "all the members" except Reliance Jio, who it said was the only member opposing it.

"We would expect the member partners to take utmost care while talking about the functioning of the Association," said the statement signed by Rajan Mathews, director general of COAI.

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