Reliance Jio accuses Airtel of hiding profits to claim loss on IUC charges

Reliance Jio on Tuesday alleged that Airtel misrepresented facts purposefully to create a smoke- screen and hide its ill-gotten profits to support its false claim of loss from call connection charges.

Last week, Bharti Airtel had accused Jio of "misleading" the Telecom Regulatory Authority of India (Trai) and public over the interconnect usage charge (IUC) and claimed it suffered a loss of Rs 6,800 crore in the last five years due to low mobile call connection charges fixed by the regulator.

The Mukesh-Ambani led telecom firm said that Airtel's representation on loss due to prevailing IUC rates is "grossly incorrect and fallacious".

"We submit that all the contentions of Airtel are fallacious, not based on true facts and are misleading in nature. We request that the authority may take appropriate action against Airtel for such mischievous and frivolous submissions," Jio said in a letter to Trai Chairman R S Sharma.

Telecom operators levy IUC on incoming calls from other networks and the charges are passed on to subscribers.

At present, IUC of 14 paise is levied on call made from mobile phones. Incumbents have claimed that IUC should in the range of 30-35 paise while Jio and small operators have demanded to make it nil.

"It is obvious that this misrepresentation of facts and wrong interpretation of data has been carried out purposefully to create a smoke-screen to hide its ill-gotten profits and to support its false pretence of loss under the existing IUC regime," Jio said.

In a presentation before Trai, Reliance Jio had earlier said that telecom operators gained to the tune of Rs 1 lakh crore from the IUC. In the presentation, without naming telecom firms, Jio said that operator 1 gained Rs 46,958 crore, operator 2 Rs 28,904 crore and operator 3 Rs 28,752 crore.

Jio in the letter said that Airtel made calculation by representing mobile call connection charges as 30 paise per minute using a method which Trai has never accepted and world over the methodology has been abandoned.

The RIL's telecom venture alleged that Airtel's outgoing tariffs for calls on network of other telecom operators "clearly show a premium" that it charges from customers to compensate for the IUC that it would need to pay to other operators while it does not charge the same amount for calls made within its network.

"Airtel has purposefully endeavoured to confuse the issue by adjusting this excess recovery against its IUC pay-out of around Rs 24,750 crore, which Airtel has already recovered as part of tariff from its subscribers...(and) cannot be again adjusted against total IUC receipt made by Airtel. Clearly, this subterfuge is created to reduce the impact of true excess recovery," Jio said.

Countering Jio's allegations, an Airtel official said that Reliance Jio has added IUC on calls made within Airtel network in its estimation.

"Therefore Jio's calculation is blatantly misleading with false calculation to inflate the numbers. Which operator pays IUC charge on the on-net calls," the Airtel official said.

Jio has said the IUC on Airtel's on-net calls have been included in the calculation based on the latter's statement at Trai workshop that the cost of work done by the Sunil Bharti Mittal-led firm in terminating a call is agnostic to the originating operator.

"Therefore it is only appropriate that the recovery is calculated on all incoming traffic handled by Airtel," Jio added.