By Md. Tariq Junaid
In the last one year, the telecom sector in India has experienced an unprecedented change in its business ecosystem. The launch of Reliance Jio with its free services pulled the ground beneath the feet of the incumbent telecom operators in the country. In return, major existing players have put in all their resources in order to make things difficult for Jio. In fact, the Telecom Regulatory Authority of India (TRAI) has reported that Airtel and Vodafone have intentionally set up barriers to hinder the growth of Jio.
Penalty for major telcos
In October 2016, TRAI had recommended imposing a penalty of Rs. 3,050 crores on Airtel, Vodafone and Idea Cellular for engaging in anti-consumer behaviour by intentionally depriving Jio of adequate number of Points of Interconnect (PoIs). This resulted in millions of call failures as PoIs help in interconnecting calls from one network to the other.
Citing violation of mobile license rules and regulations, the telecom regulator had slapped the highest level of penalty on each of the three telcos. This included a fine of Rs 50 crore per telecom circle. Airtel and Vodafone India were to pay a penalty of Rs 1050 crore each for 21 telecom circles they operate in, while Idea was to be fined for Rs 950 crore for 12 telecom circle it operates.
The penalty discord: DoT versus TRAI
In February 2017, the Department of Telecommunications (DoT) wrote to TRAI asking them to give a “reconsidered opinion”. However, TRAI’s chairman did not specify anything further on this. After several months, TRAI has again reiterated its recommendation by urging DoT to impose the penalty. It has claimed that after its intervention, these telcos have provided PoIs on notices as short as 2-3 days . This clearly indicates willful delay on their part.
The DoT has taken a rather safe stand on this issue by stating that operators have disputes on a host of points. However, TRAI has made it extremely clear that personal disagreements should not affect the quality of service.
How have the telcos responded?
Defending itself, Airtel released a statement disagreeing with the observations made by the regulator. According to them, the penalty imposed by TRAI was based on an incorrect assessment of the situation at hand. The telco has also requested DoT to reject TRAIs appeal and consider the unprecedented pace at which Airtel has provided PoIs to Jio.
The launch of Reliance Jio and its meteoric rise has significantly affected the businesses of the incumbent operators. In fact, the impact was so huge that major rival operators considered mergers (Idea-Vodafone Merger) and indulged in cost cutting strategies that defied logic.
The murky competition continues
While the incumbent operators continue to deny allegations, statistics revealed by Jio indicated that 4.8%, 3.1% and 1.2% voice calls from Jio had failed on Bharti Airtel, Idea Cellular and Vodafone India networks respectively. These statistics are alarming considering the maximum 0.5% call failure rate mandated by the TRAI for Quality of Service (Q.o.S) among service providers.
In a complaint filed by Jio to TRAI, it has been alleged that major telcos have been violating several rules like the license directives, telecom tariff orders and Mobile Network Portability (MNP) guidelines. They have apparently lured customers using retention offers and special tariff discounts when they wished to port to other networks (Jio).
Considering the disruptive impact of Jios entry in the telecom market, it wouldnt be wrong to assume that the incumbent operators may have intentionally set up barriers to affect its growth.
Jio is the new big thing
In February 2017, Jio claimed that it had acquired a staggering 100 million users in the first 170 days of the launch of its “free services”. Although it sent the market into a frenzy, most believed that the new entrants success would take a severe hit when the users would have to pay for services. Come March 31st, when the “free services” ceased, Jio went on to register a massive 72 million paid users for its prime services. This was a huge blow to the market leaders who had been struggling to get an edge over their new rival.
With decades of legacy, leading telco operators in India (Airtel, Vodafone and Idea) have substantial influence over the market. If not for the immense resources and market presence of Reliance Industries Limited, Jio would have struggled to survive.
With a combined market share of 60.39%, as of February 2017, these major players can affect any networks connectivity and quality of service, even illegally. But now with TRAI and DoT stepping in, it will be interesting to see how these operators play a fair game as they struggle to maintain market share.
Featured image credits: Pexels