Voice calls made by Reliance Jio Infocomm Ltd subscribers to rival networks within India will be free from 1 January, India’s largest mobile operator by market share said on Thursday.
The decision to stop charging for calls comes as the telecom regulator has mandated that telcos will not have to pay so-called termination charges to rival networks starting 1 January. The termination fee was set at 6 paise per minute till 31 December by the Telecom Regulatory Authority of India (Trai).
“For context, in September 2019, as per directions of the Trai, the bill-and-keep regime is being implemented in the country from 1 January, ending IUC (interconnection usage charge) for all domestic voice calls,” said Reliance Industries Ltd (RIL), the parent of Jio, in a stock exchange filing.
Under the bill-and-keep regime, telecom operators do not have to pay termination charges to each other.
On Thursday, Jio said it was forced to charge its customers for off-network voice calls at a rate equivalent to the applicable IUC because Trai deferred the implementation of zero IUC regime by a year till 31 December 2020.
“This was expected, as Trai mandated zero-IUC charges from 1 Jan ‘21 and RJio (Reliance Jio) had committed that this charge would be only till IUC is not zero,” said Hemang Jani, head of equity strategy— broking and distribution, Motilal Oswal Financial Services Ltd.
Jani said the revenue impact for Reliance Jio would be “insignificant” as it already offers 1,000 minutes free off-network calls to its users.
“While doing so, Jio had assured its users that this charge would continue only till the time Trai abolished IUC. Today, Jio has delivered on that promise and made off-net voice calls free again,” RIL said in the statement.
Reliance Jio was launched in September 2016, following which India’s telecom sector witnessed massive disruption with the telco’s almost free voice and data services. Jio’s offers not only helped it gain a major share of the market but led to a situation of shrinking revenues and mounting debt for rivals Bharti Airtel Ltd and Vodafone Idea Ltd.
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