In what could be the end of an era of free calling, Mukesh Ambani led Reliance Jio has now started charging its customers for calling on other networks than its own. The step is seen as Jio's response to account for the termination charges it pays its rivals Bharti Airtel and Vodafone Idea. Lately, Jio and other telcos have been engaged in a war over interconnect usage charges (IUC).
Earlier this week, Jio had claimed that the Airtel and Vodafone Idea users, especially those using 2G networks, have been bombarding Jio's network with missed calls between 25 to 30 crores against which the company was obliged to pay 13,500 crores in last three years.
The company also added that although it had promised its customers for free calls it was "compelled" to charge over 350 million users to recover the 6 paise per minute IUC it pays to other telcos, till the Telecom Regulatory Authority of India (TRAI) brings the fee down to zero. RJio also added that it will compensate the users by giving additional data, to ensure no "effective increase" in tariffs for its customers. The company also clarified that calls from Jio to Jio, to landlines and those made over other apps like WhatsApp will remain free.
Now with the new condition, all the Jio users wanting to call on VodafoneIdea and Airtel networks will have to buy additional top-up vouchers of Rs 10, Rs 20, Rs 50 and Rs 100, The Economic Times reported. SBICap Securities' head of research Rajiv Sharma said that Jio's decision to introduce a fee on outgoing calls to Airtel and VodaIdea network may have a multiplier effect in pushing up tariffs indirectly. "Airtel and Vodafone Idea could easily respond to Jio's move by hiking voice rates, finally ending the era of free voice tariffs," he added.
While some of the other industry analysts are seeing this step as a great opportunity for other telecos to hike tariffs as well. IIFL Securities executive vice president Sanjiv Bhasin, said, "Customers need to also realize that the era of freebies and unsustainable call rates is finally drawing to a close, and so, they will have to shell out a little more for mobile phone services. That Jio did not come up with disruptive home broadband plans last month, was a clear indicator that it is keen on ARPU (average revenue per user) growth now and not merely in expanding customer base."
