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Ever since Reliance Industries launched their telecom service Jio, they have been in tussle with the telecom giant Airtel. This fire further enraged on Friday, before the annual general meeting of Reliance as the two engage in another heated brawl.
The dispute started as Airtel Chief Regulatory Officer, Ravi Gandhi said that Jio's network is “getting a free ride” continuing with its “strategy of predatory pricing”. Reliance dismissing the former’s claim, responding to it with its own claim that Airtel has made “excess recovery” of nearly Rs. 1.2 lakh crore from Mobile Termination Charges(MTC).
On this, Airtel released a statement saying, “The allegations made by Reliance Jio regarding Airtel earning excess revenue from MTC are not only false but laughable”
MTC is the charge paid to a telecom company by another when a user calls their network. This is how companies allow free calls within their own network.
The statement added, “By proposing a transition to the 'Bill and Keep' regime with zero MTC, Reliance Jio wants to simply transfer its cost to Airtel and other operators.”
“The TRAI mandated MTC of 14 paise is well below the cost of producing a minute, which is currently at 35 paise. In fact, with the tsunami of calls originating from Reliance Jio's network, Airtel loses 21 paise for every minute that is carried on its network,” it further said.
Airtel claims that Jio’s actions have caused a total loss of 550 crores per quarter for Airtel alone.
Airtel said that according to estimates this cost would be to the tune of Rs 15,000 - 20,000 crores per year for the industry and will only increase going forward. Such cost transfer will allow Reliance Jio to use its muscle power and price its services in a predatory manner to kill the rest of the industry and create a monopoly.
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