Reliance Jio Slams Airtel, Vodafone's 'Baseless Allegations' on TRAI's IUC Ruling

Reliance Jio has rejected the accusation by rival giants Airtel and Vodafone that suggested it would benefit from the abolition of interconnect usage charges (IUC) that the telecommunications regulator TRAI announced Tuesday evening.

One-year-old telecom operator Reliance Jio, which is owned by India's largest industrial house Reliance Industries, said on Wednesday it has always offered voice calls to customers in India at no charge, hence there was no logic in the accusation by Airtel and Vodafone.

"There is no question of any advantage from the new IUC regulation to Jio as it has already passed on all the benefits to customers. We deny any benefits to Jio," Reliance Jio said in a statement. "At a time when the world is moving towards IP-based technologies, cost of voice has come down to a fraction of a paisa and the customers should enjoy this advantage."

Late Tuesday evening, regulator TRAI slashed the interconnect usage charges that telecom operators in India impose for handling voice calls originating from each other's networks. The revised interconnection charge, which is effective starting October 1, is 8 paise per minute, down from 14 paise per minute. TRAI also said that starting January 1, 2020, the interconnect usage charge will be completely abolished.

Airtel and Vodafone fiercely resisted the new directive from TRAI, saying that the move is in favour of Reliance Jio. Airtel, which has over 260 million subscribers on its network, said it was "genuinely dismayed" by the decision. "The suggested IUC rate, which has been arrived at in a completely non-transparent fashion, benefits only one operator which enjoys a huge traffic asymmetry in its favour," the company said in a statement.

Vodafone, which is in the process of merging with telecom operator Idea, found the decision yet "another retrograde regulatory measure that will significantly benefit the new entrant alone while adversely affecting the rest of the industry as a whole."

"It is appalling that the incumbent operators have [...] gone ahead and made untrue and baseless allegations against the process for determination of IUC or the regulator. The incumbent operators have a history of opposing all the IUC regulations over the last 8 years, but have not been successful in thwarting passing of the benefits of lower IUC to customers," Reliance Jio said.

Despite Jio's statement, analysts say that it will benefit the most from the TRAI's directive. For one, they said, its operation cost will substantially go down as it will have to pay other telecom operators less money. Some analysts estimated that Airtel, Vodafone, Idea and other telecom operators will see a substantial drop in their revenue.