Procurement News Notice |
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| PNN | 7889 |
| Work Detail | Escalating the war of words between existing telecom providers and Reliance Jio, the Cellular Operators Association of India (COAI), the industry body for telecos, has written another letter to the Prime Minister’s Office pointing out that existing operators like Airtel and Idea, are not “obliged to entertain interconnect requests” that are “anti-competitive”. The issue is one that stands at the crux of the battle between Jio, which is trying to disrupt the market by providing voice calls through data, and existing operators who are threatened by it. Points of interconnect and the charges that apply for using them are vital cogs in any telecom network. A point of interconnect is where one operator’s network interfaces with that of another. It is the crucial point in the pan-India network where calls placed by subscribers from different networks are connected to each other. If Reliance Jio is denied all Points of Interconnect by all other operators, its subscribers will not be able to place calls to users of other networks. Interconnect usage charges (IUC) are paid by telecom operators to each other for the use of these services. In the most recent letter, COAI has asked the PMO to intervene and restore fair competition. “They (operators) wish to politely clarify that they are in no position, by way of network resources, or financial resources, to terminate volumes of traffic which are markedly asymmetric. Neither are they obliged to entertain interconnect requests which are derived from abnormal induced traffic patterns that game the IUC regime and are anti-competitive,” COAI said. The letter, addressed to Principal Secretary of PMO Nripendra Misra, does not reflect the views of RJio, Aircel and Telenor, it clarified. The current stance of the COAI is that Reliance Jio had been using the points of interconnect in a manner that is not commensurate to the charges being paid. In one of its earlier letters to the Government, COAI said its members have provided Reliance Jio Infocomm sufficient capacity to support 10 times more than the customer base it currently claims, and attributed congestion in the network to free calls and data service the company is currently offering, which it is now terming as “anti-competitive”. The industry body had also countered RJio’s claims of having 1.5 million customers in the trial phase and, citing reports, alleged that the new entrant has activated 2-3 million subscribers. Reliance Jio had hit back accusing existing operators of not releasing sufficient number of interconnection ports for the ongoing test run of its 4G services. RJio has submitted to TRAI that it will need 12,727 network interconnection for mobile services and 3,068 points for STD call facility before the commercial launch of its services. In its latest letter, COAI referred to the free voice calls by RJio as a “free lunch” and said that RJio seeks to pass an overwhelming burden on to rival operators through tariff manipulations which exploit and game the IUC regime. “(RJio seeks to) offload tsunamis of asymmetric voice traffic at IUC terms which will choke and financially destroy competition. IUC regimes anywhere in the world are meant to facilitate fair competition, and are not designed for such abuses,” COAI said. The body said the free call offer by the new operator will result in the total voice minutes generated by RJio alone to be equivalent to those generated by all other Indian operators put together. “...in a very short time, other operators will have to handle voice traffic which is double their total present traffic. Of course, this is fanciful, because networks would have collapsed earlier,” it said. COAI added that the huge volume of traffic from RJio will pull down the weighted average voice realisation for other operators from 30-40 paise to 22-25 paise per minute or lower, making it financially difficult for other telecom firms to operate. |
| Country | India , Southern Asia |
| Industry | Telecommunication |
| Entry Date | 15 Oct 2016 |
| Source | http://www.newindianexpress.com/business/news/Telecom-operators-body-writes-to-PMO-against-RJio-seeks-restoration-of-fair-competition/2016/09/07/article3615542.ece? |
