Saturday, 07 December 2019

Jio's decision to start charging for off-network calls offers hope to India's other operators

By Chris Kelly, Total Telecom
Friday 11 October 19

Jio will charge INR 0.06 for off-network calls, as it attempts to claw back interconnect charges levied by the country's telecoms regulator

Reliance Jio has announced that it will levy an additional charge on its customers for calls made to subscribers on rival networks, in an attempt to claw back the Interconnect Usage Charge (IUC). Jio had previously offered free voice calls but will now charge INR 0…

Reliance Jio has announced that it will levy an additional charge on its customers for calls made to subscribers on rival networks, in an attempt to claw back the Interconnect Usage Charge (IUC).

Jio had previously offered free voice calls but will now charge INR 0.06 per minute ($0.0009) for calls made to users on other networks. Jio claims that the policy will be revoked, once the Telecoms Regulatory Authority of India cancels the IUC on the first of January 2020.

India remains one of the toughest and most competitive telecoms markets in the world, with operators trading on wafer thin margins since Jio launched its range of ultra-cheap 4G data and handset tariffs in 2016. Since then, Indian operators have ben involved in a race to the bottom on price and have seen their revenue streams dwindle, as India's other operators struggle to compete with Jio's relentless assault on their profit margins.

But Jio's decision to pass on the cost of the IUC to its customers could be a sign that it is also feeling the pinch of the prevailing economic conditions.

A report in the Hindustan Times highlighted that shares in both of Jio's rivals surged after the news that Mukesh Ambani would be temporarily ending free calls on his company's networks.

Vodafone Idea's share price rose by 18 per cent following Jio's announcement, while Bharti Airtel's stock climbed by 5 per cent.

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BSNL to raise $1.7bn to fund turnaround

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