COAI Further Escalates Corporate Battle With Reliance Jio by Writing Directly to PM

The telecom industry lobby characterises the telecom regulator's recent interventions as a step which will harm the roll-out of Digital India.

New Delhi: The Cellular Operators Association of India (COAI) has stepped up its battle against the Telecom Regulatory Authority of India (TRAI) and new entrant Reliance Jio by writing a letter to the Prime Minister’s Office, accusing the telecom regulator of a “pattern of discrimination” and of fostering a regulatory environment that could hurt the rollout of rural telecom networks.

The telecom industry lobby has been butting heads with Reliance Jio and TRAI over the last three to four months over a number of issues such as uniform spectrum usage charges. Over the last week though the tipping point appears to have been a TRAI consultation paper that suggested inter-connection usage charges (IUC) could be done away with; a move that the regulator believes will foster IP networks and lower calling rates but the telecom lobby believes is geared at helping Reliance Jio. Consequently, COAI has over the last week written furious letters to the Department of Telecommunications (DoT) and TRAI, accusing the regulator of “adopting policies to either promote or discriminate between existing and new entrants”.

In the letter sent to the PMO, the COAI repeats some of its arguments but also includes a new implication. Namely, that many of TRAI’s recent interventions and policy consultations will directly harm the prime minister’s Digital India programme, affect rural Internet penetration and hurt overall investor sentiment.

In its letter, COAI pinpoints three major issues. They are:

Mobile termination charges – The COAI’s primary grievance is with mobile termination charges. In the letter it points out how the the charges have been “acknowledged by TRAI and DoT as the single most determinant factor of rural rollouts over the years”. The lobby’s argument here is that the next review of whether these charges should be reduced was scheduled to have happened only in 2017-2018 and since the issue of capping these charges is under sub-judice in various courts, it makes little sense to float a consultation on the scrapping of IUC right now. Not only does this exercise “appear to hurt the financial and operational viability” of existing operators according to COAI, but it will apparently have a “significant impact on rural rollouts”, thus “impacting both the objectives of Digital India as well resulting in loss of revenues to exchequer”.

Internet telephony termination – The telecom lobby’s grievance here deals with a consultation paper floated by the regulator in late June that essentially looks at reducing the arbitrage between OTT players such as WhatsApp and telecom companies such as Reliance Jio which are looking to make initiate a call using data (through VoLTE or VoIP) and having it terminate on a traditional landline network. COAI believes that by trying to regulate Internet telephony termination charges, TRAI is not only trying to regulate the price of a service that is “niche and largely unknown”, but that the regulator also seems in favour of allowing “unlicensed entities to provide unrestricted Internet telephony”.

In this point, COAI is weakest. While the coming of Reliance Jio could expand VoLTE-phone network calls, for which a regulatory framework needs to be in place, other telecom operators such as Airtel also have similar capabilities that they could exploit.

Call drops –  This has been perhaps one of the most contentious issues in the last year, putting TRAI (which is fundamentally a ‘quality of services’  regulatory organisation) and the telecom industry on opposite sides. COAI characterises TRAI”s recent attempts at regulating call drops (via a consultation paper floated last week) as a “draconian measure” meant to “financially penalise and foster perceptions” and aimed at discredited existing operators.

COAI also neatly absolves the DoT of any blame, pointing out how the department has taken a more “enlightened approach” to addressing call drops by working with operators in cell site acquisition and smoothing over problems such as EMF radiation awareness.

TRAI on the other hand, COAI points out, is intent on forcing telecom operators to more specifically disclose the level of call drops by tightening the parameters by which we judge quality of service standards in this area.

Wham, bam

These three major issues, COAI writes in the letter, leads to “increasing disenfranchisement of existing operators” and “bodes ill for investments, industry growth, customer services and upsets the well-established level-playing field paradigm”.

The lobby’s director-general Rajan S Mathews caps the letter off by asking the prime minister to resolve these issues. “We request a meeting with you [sic] kind self to resolve these concerns so as to enable the industry to progress further towards achieving the Digital India vision of the government of India. Kindly note Reliance Jio has a divergent views expressed herein.”