Reliance Jio’s announcement of free calls and other freebies has worried the other telecom operators of India who now have expressed their worry that these free launches may choke and financially destroy competition.
According to a report of Economic Times, Cellular Operators Association of India (COAI) has written to PMO expressing the concerns of Indian telecom operators. This is the second letter by the organization, which consists of Indian GSM service providers and lobbies for their interests.
“Unloading tsunamis of asymmetric incoming voice traffic from a (potential) 100 million Reliance Jio customers can lead to the weighted average voice realisation of existing operators plunging from 30-40 paise per voice minute to 22-25 paise per voice minute or even lower,” COAI wrote in the letter, as per the report.
Meanwhile, COAI’s director general, Rajan Mathews, was quoted in the report as saying: “Reliance Jio may well make up some part of this massive voice cross-subsidy by way of data revenue realisations, by way of customer acquisitions/churn, but it becomes abundantly clear that the overwhelming burden of this free lunch is sought to be passed on to rival operators through tariff manipulations, which exploit the Interconnect Usage Charge (IUC) regime, and offload tsunamis of asymmetric voice traffic that will choke and financially destroy competition.”
COAI’s latest salvo came a week after Jio’s formal launch of services on September 5. Earlier Reliance Jio’s Mukesh Ambani while speaking at the RIL AGM meet accused current telecom operators of blocking Jio users’ calls. He also exhorted the telecom operators to offer more interconnect points for better user experience.