rahul1117kumar
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A fresh wave of mobile data revolution in the country is in the offing. With Reliance Jio officially announcing commercial roll out of its services in India, incumbent players are under immense pressure to match Jio’s disruptive data plans and offers. Though Airtel and Vodafone have significantly dropped their data prices, but Jio has edged them out with much more lucrative offers. One of the most lucrative offers that Reliance Jio is giving is free voice calling. At the company’s Annual General Meeting (AGM), Chairman and Managing Director Mukesh Ambani announced that Jio subscribers will have to pay only one price for all of Jio’s suite of services including data and applications. It also announced making voice calls free from its network to other networks, first of its kind in the industry.
While you may think Reliance Jio has made the voice calls free, and with such low-cost 4G data plans Jio is a better deal, Rajan S Mathews, Director General of the industry body Cellular Operators Association of India (COAI), thinks otherwise. He points out that Reliance Jio is offering its voice calls on its 4G network, which is primarily used for data. On other networks say Airtel or Vodafone, you will see network falling back to 3G or 2G when making a voice call whereas use 4G for data. In case of Reliance Jio, the data and voice call remain on the same network. In other words, you are making data-based calls, for which Reliance Jio is charging you a sum, even though its significantly low at Rs 50 for 1GB.
Mathews further says that Reliance Jio’s voice calls cannot be termed free as the telecom company will attract a 14p interconnect charge like the routine telecom operators incur for their voice calls. “So, when you say that it has made voice calls free on an all data network how do you make a voice call? So, all you’re saying is that you’re selling a data plan, which is a bundled data plan and since VoLTE can work on that bundled plan you can call it free. But in the sense you’re buying a data plan and you use some of it to make voice calls but it goes through the data stream or you use it for all data but either way you can call it free but when there is a voice component that has to be handed over to an incumbent operator that has to be terminated on a mobile number that will attract an interconnect. So, how can you then say that you will give it away free when you’re incurring a cost of 14 paise,” he commented.
With Reliance Jio making its voice services free, will it lead to a scenario where voice calls become absolutely free in the country? Mathews doesn’t think it is happening anytime soon, with India’s majority of users are still using voice as primary communication medium and that India is still one of the top countries with highest amount of time spent on voice calls. That said, some of the recent reports have clearly showed a change in this trend with users spending more time on apps than the voice calling.
“As I said I don’t think there’s anything called free it’s only a question of how you position it. Because, there will always be a cost to providing a voice whether it’s on an all data network or a hybrid network or an all voice network it’ll always have a cost component. The only question is do you use it as a loss leader or do u cross subsidize it. We know that it happens in many industries, cross subsidies have been known to happen. Therefore, I don’t think that voice is going to go away,” he added.
“Indians have one of the largest minutes of usage anywhere in the world and at 36,318 minutes of use it’s far in a way higher than even what the advanced countries have so vernacular is so important that when u go on a data network your typing stops the great majority of people in vernacular it’s a tough thing to start typing in the vernacular,” he elaborated.
Mathews’ comments come after Reliance Jio and COAI were at loggerheads on the issue of interconnect. Reliance Jio accused incumbent players of not abiding by regulations on the issue, while COAI said that they have already provided it with enough interconnect capacity. At today’s AGM, Mukesh Ambani pointed out the issue of call drops. “Incumbent operators have significant advantages over new entrants, since incumbents have well-established networks and existing customers. New entrants require fair access to both. Therefore, the onus is rightly on the incumbent operators not to misuse their market power by creating unfair hurdles, when it comes to providing points of interconnect between their networks and Jio’s network,” Ambani said.
Reliance Jio’s free voice calls aren’t actually free: COAI’s Rajan S Mathews
While you may think Reliance Jio has made the voice calls free, and with such low-cost 4G data plans Jio is a better deal, Rajan S Mathews, Director General of the industry body Cellular Operators Association of India (COAI), thinks otherwise. He points out that Reliance Jio is offering its voice calls on its 4G network, which is primarily used for data. On other networks say Airtel or Vodafone, you will see network falling back to 3G or 2G when making a voice call whereas use 4G for data. In case of Reliance Jio, the data and voice call remain on the same network. In other words, you are making data-based calls, for which Reliance Jio is charging you a sum, even though its significantly low at Rs 50 for 1GB.
Mathews further says that Reliance Jio’s voice calls cannot be termed free as the telecom company will attract a 14p interconnect charge like the routine telecom operators incur for their voice calls. “So, when you say that it has made voice calls free on an all data network how do you make a voice call? So, all you’re saying is that you’re selling a data plan, which is a bundled data plan and since VoLTE can work on that bundled plan you can call it free. But in the sense you’re buying a data plan and you use some of it to make voice calls but it goes through the data stream or you use it for all data but either way you can call it free but when there is a voice component that has to be handed over to an incumbent operator that has to be terminated on a mobile number that will attract an interconnect. So, how can you then say that you will give it away free when you’re incurring a cost of 14 paise,” he commented.
With Reliance Jio making its voice services free, will it lead to a scenario where voice calls become absolutely free in the country? Mathews doesn’t think it is happening anytime soon, with India’s majority of users are still using voice as primary communication medium and that India is still one of the top countries with highest amount of time spent on voice calls. That said, some of the recent reports have clearly showed a change in this trend with users spending more time on apps than the voice calling.
“As I said I don’t think there’s anything called free it’s only a question of how you position it. Because, there will always be a cost to providing a voice whether it’s on an all data network or a hybrid network or an all voice network it’ll always have a cost component. The only question is do you use it as a loss leader or do u cross subsidize it. We know that it happens in many industries, cross subsidies have been known to happen. Therefore, I don’t think that voice is going to go away,” he added.
“Indians have one of the largest minutes of usage anywhere in the world and at 36,318 minutes of use it’s far in a way higher than even what the advanced countries have so vernacular is so important that when u go on a data network your typing stops the great majority of people in vernacular it’s a tough thing to start typing in the vernacular,” he elaborated.
Mathews’ comments come after Reliance Jio and COAI were at loggerheads on the issue of interconnect. Reliance Jio accused incumbent players of not abiding by regulations on the issue, while COAI said that they have already provided it with enough interconnect capacity. At today’s AGM, Mukesh Ambani pointed out the issue of call drops. “Incumbent operators have significant advantages over new entrants, since incumbents have well-established networks and existing customers. New entrants require fair access to both. Therefore, the onus is rightly on the incumbent operators not to misuse their market power by creating unfair hurdles, when it comes to providing points of interconnect between their networks and Jio’s network,” Ambani said.
Reliance Jio’s free voice calls aren’t actually free: COAI’s Rajan S Mathews
