Reliance Jio Infocomm Ltd. made free national calls to other operators, one day before the telecoms regulator eliminates the interconnection user fee.
“In honor of its commitment to zero out-of-network domestic voice call charges as soon as interconnection user fees (IUC) are eliminated, Jio will once again make all non-network domestic voice calls free. network as of January 1, 2021, “the Mukesh Ambani-owned carrier said in a statement. “National voice calls on the network have always been free on the Jio network.”
Operators pay IUC of 6 countries per minute each time their subscriber calls a user on the rival network. Initially, Reliance Jio was a net payer, offering free voice services and urged the regulator to abolish the fee even when incumbents wanted to delay the zero IUC regime. After being put off by the Telecommunications Regulatory Authority of India for a year, Reliance Jio began charging for its voice calls as of October 2019 citing the recovery of the IUC charges. The company, however, had promised to stop charging IUC once TRAI abolished it.
Reliance Jio in December 2019 had introduced ‘All in One’ plans, priced 40% higher than their previous plans. Those offered unlimited calls from Jio to Jio, but calls to other networks were capped at 300 or 12,000 minutes depending on the plan, which had IUC charges built in.
While a toll-free call would mean caps on minutes will disappear, prices will remain unchanged. This implies that the IUC incorporated in the plan will be absorbed in the rate. Reliance Jio’s average revenue per user was Rs 145 in the quarter ending September, an increase of 14% year-on-year. That compares with Bharti Airtel Ltd.’s ARPU of Rs 162 in the second quarter, a 27% increase from a year earlier.
Reliance Jio’s cheapest 2GB plan for 28 days starts at Rs 129, a 13% discount for rivals. Other popular prepaid plans include 1GB / day at Rs 149 for 24 days, 1.5GB / day at Rs 199 for 28 days, and 1.5GB / day at Rs 555 for 84 days.
Reliance Jio is undoubtedly now a net IUC earner, and the abolition of the fee is likely to affect its income and margin. Bharti Airtel and Vodafone Idea Ltd., on the other hand, will benefit as they became net payers last year.
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