The issue of points of interconnection (PoI) between Reliance Jio and Bharti Airtel, India’s largest telecom operator by subscribers, continues to simmer with Reliance Jio saying that while it welcomes Airtel’s recent offer of providing more interconnections, the quantum needs to be increased.
Reliance Jio had issued similar views on September 15 when it said an understanding with Vodafone India had been reached but that more needs to be done.
Mukesh Ambani-owned, newly-launched Reliance Jio, which had brought up its differences with existing telecom operators when it launched 4G services via Jio on September 5, on Sunday said it “welcomes the decision of Bharti Airtel of providing more POIs. However, the quantum of POIs proposed to be released by Airtel is substantially less than the requirement estimated based on transparent workings shared with Airtel.”
PoI is the physical linking of one carrier’s network with that of other carriers that can enable voice calls to seamlessly move across different telecom operators. On the day of the launch, Ambani said the so called incumbent operators – Bharti Airtel, Vodafone, Idea Cellular – were not cooperating and that this had led to failure of 50 million calls in a week.
Reliance said the number had gone up sharply now. “More than two crore calls are failing everyday between the two networks (with Airtel), which is far in excess of quality of service parameters and of alarming proportions,” Jio said on Sunday.
Service partnership among India’s cellular operators has been patchy for the more-than-a-billion subscribers the country has, in what is one of the world’s fastest growing telecom market. Inability to connect, frequent call drops and slow data speeds continue to plague the country’s cellular industry despite strong government proposals including fines for dropped calls.
Existing operators have been citing capacity issues. “According to the incumbents, offering more interconnection points to Reliance Jio will not only create a financial burden but also swamp their network and outgoing calls of their existing customers by the huge number of incoming calls from RJio,” Rajan Mathews, director general of industry body Cellular Operators Association of India recently told HT.
But the differences are more due to the negative impact Jio will eventually have on profitability of existing operators. “Jio’s tariff plans may gradually push the market toward “data-only plans”, under which customers are charged only for data, not for voice and text messages. Such a shift could be particularly disruptive, given that most incumbents still derive bulk of their revenue and profit from voice and text messages. The top-four telcos’ average operating EBITDA (operating profit) margin is likely to narrow by at least 200-250 basis points in the next year,” an analysis by ratings firm Fitch has said.
Reliance Jio also said that Airtel has been insisting on deviations from the Interconnection Agreement between the two companies. “It is apparent that Airtel continues to abuse its market dominance by imposing onerous conditions which will imminently hinder Reliance Jio… It appears that the quality of service will continue to suffer and Indian customers will be denied benefits of superior and free voice services as a result of such anti-competitive behavior,” Jio said.
Reliance also cited that Airtel has been blocking mobile number portability facility, which allows customers to migrate from one operator to another.