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Airtel says Reliance Jio distorts facts to create policy bias

LiveMint logoLiveMint 06-09-2017 Amrit Raj

New Delhi: Bharti Airtel Ltd on Wednesday wrote to the country’s telecom regulator saying that Mukesh Ambani-promoted Reliance Jio Infocomm Ltd was continuously trying to distort facts at various platforms to “show other operators in bad light and create policy bias in its favour”.

The bone of contention is interconnection user charges (IUC), paid by telecom firm which originates the call, to the one which terminates the call, currently set at 14 paise. Older telecom firms want it to be raised to at least 30 paise, while new entrant Reliance Jio wants it cut to zero. Reliance Jio said in July that India’s top three telecom firms earned Rs1.04 trillion in the past five years by not implementing a 2011 regulatory road map to cut IUC to zero.

Countering this argument in a letter addressed to the chairman of Telecom Regulatory Authority of India (Trai), Airtel said it has not made any gains on account of IUC and has instead incurred a loss of Rs6,800 crore in the last five years.

In the letter, which was reviewed by Mint, Airtel said Reliance Jio did not indicate its source of information to analyse Airtel’s IUC revenues and cited the quantum of IUC received at the gross level. Even these gross figures are much higher than what it actually received, Airtel said.

Airtel said it has received a net IUC of Rs7,795 crore in last five years. Even at present value, the net IUC received stands at Rs9,417 crore, it said.

“Not only are the facts presented by Reliance Jio grossly incorrect, but they seem to have been misrepresented with the specific purpose of maligning other operators and misleading the Trai and the public at large,” Airtel said.

“This is not the first time that Reliance Jio has adopted such tactics. Even during its representation to the IMG (inter-ministerial group), Reliance Jio had come up with misleading claims that existing operators have not infused enough equity into their operations and instead taken on debt. The truth is completely different though,” it said.

Airtel’s letter comes even as a decision to scrap or reduce interconnection usage charges is imminent.

Reliance Jio argues IUC is an artificial barrier created by incumbent operators with legacy technologies. “It is a subsidy for old operators who do not move to new technologies. Effectively, their inefficiency is being funded,” Reliance Jio had previously said.

In a presentation at an open house discussion on the issue in July, Reliance Jio said that benefits to incumbents Bharti Airtel, Vodafone India Ltd and Idea Cellular Ltd have come at a cost to consumers and smaller operators and resulted in financial distress in the sector. Reliance Jio said all investments made prior to 2010 have been recovered by industry and the top three telecom firms have generated excess returns on account of IUC charged over the years.

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