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Wednesday 29 January 2020

Jio, after Airtel & Vodafone-Idea, raising tariffs

Reliance Jio, citing the new TRAI rules, has made this policy announcement while still not revealing what its new tariff plans will be

Reliance Jio has announced an increase in the prices of its tariffs. Recently Reliance Jio had started charging its customers for calling outside its network. New tariff plans were started to facilitate the taking of extra charges for calls to the numbers of (Bharti) Airtel and Vodafone-Idea.

This is an issue of interconnection. One of the primary tools used by regulators to introduce competition in telecommunications markets has been to impose interconnection requirements on dominant carriers. This interconnection usage charge (IUC) is the factor that increased mobile service tariffs first.

Vodafone Idea and Airtel have announced before this an increase in their tariff prices, which will be effective beginning 1 December. These increased prices will be applicable to both prepaid and postpaid connections.

Reliance Jio said at a press release, “As is being said in media reports, we understand that TRAI is about to start the consultation process regarding tariffs. Like other operators, we will work with the government and strengthen the regulatory regime so that the industry can be strengthened for the benefit of Indian customers. We will increase tariff prices in the next few weeks.”

Reliance Jio has not revealed the exact prices for the different packs, but it will be announced soon.

All the companies have cited the adjusted gross revenue (AGR), to be charged by the government, for increasing the tariff. It will cost more to Vodafone-Idea and Airtel.

The Supreme Court gave a ruling in October, under which the telecom department was given the authority to collect Rs 94,000 crore as AGR from the telecom companies. This is a total of Rs 1.3 lakh crore, of which Vodafone-Idea has to pay the maximum, much as the government has constituted a committee of secretaries so that necessary measures can be taken to relieve and stabilise the tension in the telecom sector.

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