Airtel accuses Jio of predatory pricing; big 3 telcos meet IMG

New Delhi : India’s largest telecom company Bharti Airtel on Friday accused newcomer Reliance Jio of predatory pricing and demanded that operators be paid more for calls terminating on their networks as also the right to retain customers through incentives.

United against rival Jio, the three incumbent operators — Airtel, Vodafone and Idea Cellular who met the inter- ministerial group (IMG) individually — said the current call connect charges or IUC of 14 paise/minute is below cost and needs to be corrected. Idea argued that Interconnection Usage Charges (IUC) – paid by one telecom operator to another for connecting phone calls – need to be correctly determined to “prevent predatory voice pricing environment”. It also said that the Jio’s free offerings had impacted the industry “adversely” and suggested imposition of floor rate for both voice and data tariffs to check “predatory pricing”. Airtel alleged that Jio had adopted “predatory pricing” approach specifically aimed at winning market share by providing services below cost. This has severely hit the industry’s revenue, net income and return on capital employed, Airtel pointed out. “To prevent abuse of below cost termination charges, it is recommended that the present IUC should be corrected and fixed at full cost incurred by the terminating operator,” Airtel said in its presentation to the IMG. It further said that telecom regulator Trai should be “restrained” from any further reduction in IUC till the matter is finally adjudicated in court as it would cause “irreparable financial loss” to Airtel and other operators. The Sunil Mittal-led company emphasised that operators should continue to have the “right to retain customers” through offers and discounts. Jio had earlier alleged that incumbent operators were lining-up customised retention offers to influence subscribers who want to shift to a rival network.

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