Reliance Jio Lashes Out At TRAI: Does Usage Charge Harm Modi’s Digital India?

Lashing out at Telecom Regulatory Authority of India’s (TRAI) for its decision to review the deadline on zero-termination charge for calls, Mukesh Ambani-led Reliance Jio in its official response wrote that not removing the interconnect usage charge (IUC) will “sabotage” Prime Minister Narendra Modi’s flagship Digital India scheme.

The company alleged that TRAI’s move is arbitrary, against the law and anti-poor, moreover, it raises questions about the credibility of the body. Jio also accused the body of bowing down to the vested interest of certain “incumbent” telecom operators, who “exploit” the customers by charging heavily for 2G and voice calls.

The company went on to add that TRAI is overlooking the interest of the poor and marginalised sections. The discussion paper wants India to remain technologically stagnant and backward, the company added.

Jio claims that if the charges are not removed by its original deadline January 1, 2020, the company would have to end its free voice calls and increase tariffs, which will affect Consumers.

Is Reliance Jio Really Worried About Digital India?

The interconnect usage charge (IUC) is an amount a telecom operator has to pay for completing calls made by its subscribers to a rival network. TRAI had slashed the rates by 57% to only 6 paise per minute in September 2017. The body had also set January 1, 2020 as the deadline to completely do away with the charge.

Now, the telecom body has decided to dilute the deadline, which is not going down well with Reliance Jio. Jio previously supported the IUC deadline as it directly benefited the company, and gained hundreds and millions of subscribers because of its cheap internet plans and free voice calls.

The company has been gaining customers at the cost of Airtel and Vodafone Idea. According to the recently released TRAI report of August 2019, Reliance Jio registered 8.4 Mn additional subscribers and was the only company to do so. Vodafone Idea and Bharti Airtel lost around 5 Mn and 560K subscribers, respectively.

Looking at the past few TRAI reports, the largest telecom operator in terms of subscribers is Vodafone Idea, but it has been constantly losing its customer base. Bharti Airtel has followed a similar trend. Jio, on the other hand, has been gaining more subscribers in millions.

This growth for Jio can be attributed to the value for money it offers to the customer. But following the delay in implementation of no IUC, TRAI will continue to charge 6 paise per minute, which Jio will have to direct to the customers. The additional cost might discourage users from porting to Jio.

Jio has been commended for its cheap internet rates which helped to get first-time users to the online space. The launch of Jio gave PM Modi’s Digital India campaign a significant push, but saying that charging customers for voice calls makes a negative impact on Digital India might be a little extreme.