Jio is masquerading full-blown services in the guise of a trial, which amounts to predatory pricing” says its competitors

With Reliance Jio bringing in new a technological boom in telecom industry, it has made good number of enemies throughout the process. Initially these competitors’ shared a silent mode of animosity among them but now slowly and gradually, things are coming out in the open.

On Monday J S Deepak, the Telecom Secretary received a letter from Industry body Cellular Operators Association of India (COAI) which stated their issues against Jio. The complaint letter higlightingly read that, “Jio is masquerading full-blown services in the guise of a trial, which amounts to predatory pricing.” Reportedly this letter by COAL is a response to Jio’s previously given reason to Department of Telecom which blamed all the other competitors for not providing interconnect bandwidth to the customers and that is what led Jio to take this opportunity to begin with its trial offers.

Apart from the letter which COAL sent, the incumbents of Jio also brought out the issue that how the new player in their game is choking their networks through the voice traffic emanating from it. It seems quite a possibility because around 1.5 million Jio subscribers are calling people which use other leading telecom companies. As when a Jio subscriber calls to other network subscriber their calls connect at one point called Points of Interconnect (PoIs) and each operator has a limited capacity on its Pols. So in a way operators like Vodafone and Airtel are suffering from skewing up of their traffics because millions of callers are calling for free. This then eventually affects the paid subscribers of other brands than Jio.

To all these problems raised by its free services and after receiving complaint letters from the incumbents, Jio has not yet responded.

Director general of COAI, Rajan Mathews said, “We asked for clarity on whether this is compliant with regulations, as 1.5 million subscribers are tantamount to a commercial launch as the trial period has been extended yet again and networks of our operators are getting choked.”

The facts suggest that Jio which launched its trial services in December last year which further led to its users to consume 25-30 times more data than the Indian average mainly because the services are absolutely free. Its competitors have also been saying that even on its trail phase Jio is trying to port their registered subscribers.

Now we know how obvious it is getting for Jio’s competitors to get extremely troubled with its free services that are being tried out. In their letter to DoT, COAI has clearly mentioned: “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 Charges) regime, non-predatory pricing and fair competition etc.”

Given that at present 80% of calls are originating from Jio’s free network and ending on other networks, incumbents have claimed the cost of carrying this traffic as irrecoverable under the current long run incremental cost model.

The letter goes also adds a statement that Jio’s free usage been filed as tariff plan, it would have doubtless been examined for predatory market practice. But no plan has been filed, and there has been no examination. Meanwhile, such pseudo tests with free calling are throwing up one-way traffic, which is leading to never ending pseudo demand for more PoIs. Also the member operators should not be expected to provide PoIs while this “test” is being played out.”

We believe it’s high time that Jio should respond to all these allegations being put against it rather than waiting for the DOT to take an action in this matter.



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