Telecom wars reach PMO
The battle brewing between the telecom players has turned into a full fledged war with Cellular Operators Association of India (COAI) writing to the Prime Ministers’ Office “expressing deep concern” over the Telecom Regulatory Authority of India (TRAI) allegedly favouring the new entrant Reliance Jio, while hurting existing operators such as Airtel, Idea and Vodafone.
In the letter, addressed to Principal Secretary of PMO Nripendra Misra, COAI sought to bring attention to some recent consultation papers and decisions by TRAI such as on mobile termination charges and call drop regulations. These papers, the industry body said, seen along with other recent TRAI decisions, point to a pattern of discrimination against the existing mobile operators.
However, TRAI Chairman R.S. Sharma on Wednesday refuted these allegations as “baseless”.
Calling for a “level playing field”, the operators’ body, in a strongly worded letter, said that these papers seem to “have been crafted and timed to serve the interests of some new players, with complete disregard for the massive investments made by the existing operators.”
COAI added that such increasing “disenfranchisement” of existing operators through these regulatory decisions bodes ill for investments, industry growth and customer services and upsets the well established level playing field paradigm.
A war of words broke out between the existing telecom operators and Reliance Jio after COAI wrote to the DoT to ask the Mukesh Ambani-led firm to snap connections of all its 15 lakh users alleging that it was bypassing the regulations by providing full-fledged service in the guise of testing network.
Reliance Jio, however, hit back at COAI in a 8-page letter to TRAI saying the charges were “malicious, unfounded, ill-informed, and frivolous and are contrary to actual facts” and were “promoting the vested interests of the incumbent dominant operators”.
Asked about the letters that the industry body and Reliance Jio have written to the regulator, Mr Sharma had said, “TRAI is not the body that decides between issues of two operators… these are decided by TDSAT… if there is anything that comes under TRAI, we will take a look, otherwise other agencies under which these issues come will deal with it.”
Last week, after TRAI came out with a consultation paper to review Interconnection Usage Charges (ICU) that carriers pay to each other for calls made from one network to another, COAI alleged bias by the regulator towards Reliance Jio.
The paper had sought public view on how these charges should be computed — cost based or Bill and Keep.
In the letter to the PMO, COAI points out, “The present Interconnect regime was implemented by TRAI in March 2015 and it was clearly stated by TRAI itself that the next review would take place in 2017-18. It is, therefore, surprising to see the urgency displayed by TRAI in this matter, with the consultation process initiated at such an early date and despite the fact that the matter is sub-judice in various courts of law.”
The regulator had last year cut IUC on calls made from mobile phones to mobile phones by about 30 per cent to 14 paise per call, while doing away with such charges paid by landline service providers. The decision was challenged in court by major telecos.
COAI added it appears that the exercise is aimed at hurting the financial and operations viability of existing operators. “The apparent bias towards Bill and Keep will not only have a significant impact on rural rollouts but also on the revenues of the operators…”
In Bill and Keep method, every telecom operator bills its own subscribers for outgoing calls and keeps the revenue received from the subscribers. The service providers do not pay any termination charges to each other.
This would mean that new operators will not have to pass on payment to existing operators, while the latter will have to “incur costs”.
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