Airtel distorting facts to create policy bias, alleges Reliance Jio

In an escalation of the war of words, Reliance Jio on Thursday dismissed Bharti Airtel's charges, saying the latter is attempting to create policy bias in its favour over mobile inter-connection charges at the cost of consumers.

The Mukesh Ambani-led firm, which shot off a letter to Trai today, alleged that Airtel has continued to oppose introduction of any form of competition, be it mobile services by MTNL, WLL service by basic operators or denial of sufficient network interconnection points to Jio and now attempting to use IUC for blocking new competition.

"We are appalled by the irresponsible and unscrupulous behaviour by an established service provider like Airtel, where it continues to defend its untenable position with misrepresentation. We submit that the only attempt of Airtel is to bias the policy on Inter-connection Usage Charges (IUC) in its favour at the cost of consumers and competition," Jio said in the letter.

It also contested claims of Airtel on investing Rs 79,000 crore internal cash in the business, alleging that the operator has made paltry fresh equity investment in the last several years whereas it required a much higher contribution.

"... The merit of this argument fails if we note Airtel's high leverage in spite of such reinvestment of internal cash. Airtel's debt to equity ratio is higher than most of the large global telecom companies, hence there is no merit in Airtel's argument of reinvestment of internal cash as an alternative to fresh equity infusion," Jio added.

An e-mail to Airtel seeking its view did not elicit any response.

The letter from Jio was in response to Airtel's representation before the Telecom Regulatory Authority of India, in which the Bharti firm alleged that Reliance Jio is running a "sinister campaign" to bring down the call connection charges by misleading authorities and the public with inflated figures about earnings from IUC.

Both telecom majors have been levelling allegations against each other over inter-connection usage charges -- a fee levied by an operator on incoming calls from other networks and the charges are passed on to subscribers.

The established players have been demanding higher IUC with the reasoning that every call on the network incurs a cost and expenses of an incoming call on their network should be borne by the operator from whose network the call has originated.

Jio claimed that the IUC is nothing but a subsidy for the dominant old operators and has acted as a disincentive for investment in new technologies.

Airtel, on its part, has claimed that it has suffered a loss of Rs 6,800 crore in the past five years due to lower IUC rates fixed by Trai, alleging that Jio has misrepresented facts by inflating numbers that incumbent operators have gained to the tune of Rs 1 lakh crore.

"We submit that Airtel's response to RJIL's calculations and explanation, as apparent from the news reports, is contradictory to its own claims, publicly available financial reports and is devoid of any sound logic. It is obvious that this is being done to defend its wrong and misleading representation made to support its false pretence of loss under the existing IUC regime," Jio stated.

The Ambani-promoted firm further alleged that Airtel in its letter to Trai has deliberately acted ignorant and maintained silence on the fact that the payment made for IUC is recovered by it from customers, as evident from its retail voice tariffs.

"We, therefore, request that for the sake of transparency, Airtel should be asked to make public disclosure of the excess recovery made due to this artificial tariff differential between off-net and on-net call tariffs," Jio said.