TelecomTV TelecomTV
  • News
  • Videos
  • Channels
  • Events
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • Open RAN
  • Digital Platforms and Services
  • 5G
  • Access Evolution
  • Private Networks
  • Cloud Native
  • Edge
  • Open Networking
  • Sustainability
  • AI, Analytics and Automation
  • 6G Research and Innovation
  • Security
  • More Topics
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • |
  • About
  • Contact
  • |
  • Connect with us
  • 5G
  • 6G Research and Innovation
  • Access Evolution
  • AI, Analytics and Automation
  • Cloud Native
  • Digital Platforms and Services
  • Edge
  • Open Networking
  • Open RAN
  • Private Networks
  • Security
  • Sustainability
  • Connect with TelecomTV
  • About
  • Privacy
  • Help
  • Contact
  • Sign In Register Subscribe
    • Subscribe
    • Sign In
    • Register
  • Search

Mobile

Mobile

India backtracks on zero interconnect charges plan, Jio saw it coming

Mary Lennighan
By Mary Lennighan

Dec 18, 2019

via Flickr ©  Maurits Verbiest (CC BY 2.0)

via Flickr © Maurits Verbiest (CC BY 2.0)

  • TRAI delays bill-and-keep to January 2021
  • IUC rate of 6 paise per minute remains in place
  • But real market impact likely to be limited

India's decision to push back the start of a bill-and-keep regime for mobile calls came as no surprise when its telecom regulator made the announcement this week, least of all to newcomer Reliance Jio Infocomm, which made provision for such a move two months ago.

The Telecom Regulatory Authority of India (TRAI) has delayed by one year its plan to scrap interconnect usage charges (IUC) following a market review that showed traffic asymmetries remain. It will now implement zero termination rates from 1 January 2021, rather than the start of next year.

Until then, the current IUC rate of 6 paise (0.08 US cents) per minute will apply.

On paper, the decision is not great news for Reliance Jio, which in October began passing on the cost of IUC to consumers, having previously absorbed the cost on the understanding that the regime would change at the start of next year. It claims to have made net payments of 135 billion rupees (US$1.9 billion) to rival operators in the last three years.

Jio saw the TRAI's decision coming though.

"If the telco really believed that it only had another two and a half months of interconnect charges ahead of it, would it have introduced such a controversial charge to its customers now? Seems unlikely, doesn't it?" TelecomTV asked in October.

Its assurances to customers that the new call charges would only apply until the end of the IUC period were designed to both soften the blow and push blame onto the regulator when the news eventually came that IUCs would stay, for now, at least.

The TRAI said its market analysis showed that while operators have invested in VoLTE, traffic on those networks constitutes a small portion of overall mobile voice traffic, largely due to slow adoption of 4G in India, leaving most of the country's voice traffic on circuit-switched networks. Further, it noted that while the imbalance in inter-operator off-net traffic has reduced over time, it still exists. Operator feedback suggested that 4G-only operator Jio generated significantly more calls due to the telco's unlimited calling plans, leading to asymmetry in traffic patterns.

That was Jio's point too, back in October. The telco claimed high usage of the callback method, in which a user of another operator would dial a Jio customer (who had free voice calling), hang up, then wait for a callback, was distorting traffic patterns; it also hit out at its major rivals for maintaining high 2G and 3G voice charges, thereby perpetuating the situation and leaving Jio with a large call termination bill.

That said, given that Jio has already started charging for voice calls to account for IUCs and the now limited opportunities for churn in India – there is still no cheaper option than Jio – the telco is unlikely to be hit too hard.

Further, the Economic Times quoted analysts from ratings agency Fitch as saying that the decision is only mildly positive for Bharti Airtel and Vodafone, both of which are IUC net earners, because traffic is fast becoming more symmetrical, especially as Jio's customer base grows.

Indeed, the TRAI noted that one of the service providers that responded to its industry consultation suggested that traffic asymmetries will become negligible during calendar 2020, meaning that the decision to delay the implementation of BAK may have little meaningful impact on the market. In addition, it indicated that a further review of the situation is unlikely to be forthcoming, which means the BAK regime should arrive in 2021 without further intervention.

So, presumably Jio customers will then stop paying for voice calls? Possibly. But it might be wiser to assume that, since competition is reduced and mobile rates are finally on the up in India, the telco will give with one hand and take back with the other.

Related Topics
  • 4G LTE,
  • Access Evolution,
  • Analysis & Opinion,
  • Announcement,
  • Asia-Pacific,
  • Legacy 2G/3G,
  • News,
  • Policy & Regulation,
  • Telco & CSP

More Like This

Access Evolution

Mobile services market grew in first quarter at fastest pace since 2010: Omdia

Jun 22, 2022

5G

What’s up with… 5G in Belgium, Orange, Citymesh, Vivendi & TIM

Jun 21, 2022

Access Evolution

Rogers, Shaw and Quebecor announce agreement for sale of Freedom Mobile

Jun 20, 2022

Open RAN

Dish makes last-minute dash to meet 5G launch deadline

Jun 15, 2022

Digital Platforms & Services

Virgin Media O2 reveals largest ever year for data use as it celebrates first birthday

Jun 1, 2022

Email Newsletters

Stay up to date with the latest industry developments: sign up to receive TelecomTV's top news and videos plus exclusive subscriber-only content direct to your inbox – including our daily news briefing and weekly wrap.

Subscribe

Top Picks

Highlights of our content from across TelecomTV today

10:14

Executive Interview: Vodafone’s Lucia De Miguel Albertos on the ultimate RAN Intelligent Controller

39:34

Figuring out the TCO of Open RAN

6:47

Dell's Role in Open RAN

4:24

Executive Interview: Neil McRae on BT's Open RAN Plans

TelecomTV
Company
  • About Us
  • Media Kit
  • Contact Us
Our Brands
  • DSP Leaders World Forum
  • Great Telco Debate
  • TelecomTV Events
Get In Touch
[email protected]
+44 (0) 207 448 1070
Connect With Us
  • Privacy
  • Cookies
  • Terms of Use
  • Legal Notices
  • Help

TelecomTV is produced by the team at Decisive Media.

© Decisive Media Limited 2022. All rights reserved. All brands and products are the trademarks of their respective holder(s).