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Decision on Jio’s free internet service soon

business Updated: Jan 06, 2017 21:34 IST

Reliance Jio’s free internet services might end soon(Reuters)

The telecom tribunal TDSAT on Friday asked the Telecom Regulatory Authority of India to come to conclusion on Mukesh Ambani-promoted Reliance Jio’s free 4G service within “reasonable time”.

Reliance’s new telecom venture is growing at a breathtaking pace on the back of free internet services, and has already crossed 50 million users.

Jio’s biggest rival and incumbent operator Sunil Mittal-promoted Bharti Airtel had filed a petition in the tribunal over TRAI allowing extension of Jio’s free services beyond the stipulated 90 days, until March -- which opposes the concept of fair competition.

Sources told HT that if Jio, which has deep pockets as it is backed by Reliance Industries, continues to offer free services, there will be a price war in the telecom industry, eroding profits. The industry is already under a Rs 3,85,000 crore debt, which might further go up if data realisation continues to drop.

“The price war needs to end for sustainable business to continue... Already there have been multiple disruptions in the telecom industry, data prices are falling...,” said an analyst with a Switzerland headquartered financial services company.

In the petition, Airtel had mentioned that TRAI behaved like a “mute spectator”, which questions the regulators stance over free services provided by Jio.

The next hearing is on February 1, and incumbents hope that TRAI will bring an end to Jio’s free services to normalise falling data revenue realisation.

In another high profile meeting at TRAI’s office, telecom regulator discussed a bunch of issues of the telecom industry, including the consultation paper floated on net neutrality, interconnect charges, tariff plans and Reliance Jio.

Another source familiar with the matter said that confirmed that operators showed concerns over interconnect charges, which existing telecom operators feel is already low -- at 14 paise, over 30 paise previously. Any further reduction, operators said, would impact profitability.

However, sources said that they are expecting a marginal decline, and the new interconnect charges might be another between 10-12 paise per call.

Reliance Jio continues to back zero interconnect charge, which an operator pays when a call lands on another operator’s network. Reliance Jio and Tata Tele Services Ltd (TTSL) on Wednesday opposed pleas filed by telecom firms Bharti Airtel and Vodafone.

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