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Reliance Jio interconnect dispute with Airtel, Idea to end this month

jioThe dispute over providing interconnection facility is set to end in the next two weeks, with Bharti Airtel, Idea Cellular and Vodafone giving in to the demands of new operator Reliance Jio and the regulator.

The decision to comply comes in the wake of a recommendation for a fine of Rs 3,050 cr to be imposed on the three companies for what it said amounted to wilfully blocking calls from Jio’s network.

The TRAI also said that the operators’ actions were liable to invite heavy penal action including cancellation of their licenses.

The telecom minister also held talks with the heads of all the operators last week in which he is reported to have delivered a very stern warning to the companies to fall in line.

Following the same, Bharti Airtel last week announced that it was augmenting interconnection points to levels that should be sufficient for 75 mln Jio subscribers, or about three times the new operators’ current subscriber base.

If the three operators comply with the directions, the Rs 3,050 cr fine is unlikely to be imposed.

Another key reason for the capitulation of the incumbents was Jio’s threat to extend its services free by another three months.

The extension of its Welcome Offer by three months to March 2017 would have caused pain to the incumbents as it could have resulted in even more of their subscribers using the newcomer’s network for data and voice.

The operators’ managed to escape reporting declines in their telecom revenue last quarter, thanks largely to internal delays within Jio in rolling out and activating its services. They have also been forced to cut data and voice rates to stem the tide of subscribers lining up for Jio SIM cards.

According to industry sources, all the big three operators will be providing the required interconnection points by the end of the month.

Jio is all set to announce a new Welcome Offer on Dec 3, and whether or not that would be applicable to existing subscribers would depend on whether the interconnections are working smoothly by then or not.

If the new offer is not applicable to those who were covered by Welcome Offer 1, then it is likely that all subscribers will have to start paying for their services from Jan 1 2017.

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