Reliance Jio is facing a public backlash in India after deciding to pass on an inter network connection charge of INR 0.06 per minute to its users, effectively ending free calls for its subscribers
Reliance Jio’s Mukesh Ambani and Bharti Airtel’s Sunil Mittal will not attend this year’s India Mobile Congress, as their respective companies continue to ramp up the rhetoric over the implementation of the Interconnect Usage Charge.
Both Ambani and Mittal have been key attendees at previous iterations of the show, but this year will see two of India’s most successful telecoms businessmen give the show a wide berth, according to a report by Live Mint.
Jio is facing a public backlash in India, after it scrapped free calls on its network, opting instead to pass on the cost of the Interconnect Usage Charge, levied by the Telecoms Regulatory Authority of India, to its customers.
Jio’s customers will now have to pay INR 0.06 ($0.0009) per minute for calls to numbers on Vodafone Idea, Bharti Airtel or BSNL. The charge will also apply to calls to any MVNO’s which do not use Reliance Jio’s networks.
Jio has said that it will remove the charge when TRAI cancels it on the 1st of January 2020, however, the move has prompted an angry backlash on social media, with Jio customers making their dissatisfaction clear.
India remains one of the world’s most competitive telecoms markets, with operators being forced to trade on wafer thin margins ever since Reliance Jio bought its ultra low cost 4G data and handset tariffs to the country three years ago.
“It’s great. I now get more data per day than I got in an entire month for the same amount of money,” Anil Sharma, a rickshaw driver from Delhi, told me during a recent trip to India.
While Jio’s ultra low cost tariffs and handsets have undoubtedly brought India’s digital revolution to the masses (with Jio now boasting more than 330 million subscribers), it has also wreaked havoc on the industry’s average revenue per user.
“Current conditions are unsustainable. If ARPU is just increased from around $1.50 to around $3.00, which is not a huge increase in terms of consumer cost, that would totally change the game for us,” Bharti Airtel’s CEO, Gopal Vital, said at a recent conference in the Indian capital of New Delhi.
Some analysts have speculated that Jio’s decision to pass the cost of the IUC on to its customers may be a sign that it is no longer prepared to swallow endless costs in the relentless pursuit of market share.