Telecom war: Airtel takes on Jio, says bundling IUC with tariff unjustified

Bharti Airtel on Tuesday said tariffs for mobile services are unsustainable and need to be increased.

Gopal Vittal, MD and CEO for India and South Asia, also took on the recent move of Reliance Jio to charge 6 paise per minute for voice calls made by its users on networks of other operators, saying interconnection usage charges are not part of tariff but clearing charges among operators to transmit calls.

Jio has, however, said it will compensate users by giving free data of equal value.

“We believe tariffs are unsustainable. We believe tariffs need to go up. We have always maintained this stand,” Vittal said on the sidelines of the India Mobile Congress.

On Reliance Jio’s move, he said, “Interconnect usage charge (IUC) has nothing to do with tariff. It is a clearing house, cost of carrying calls. It is a bilateral thing settled among carriers. Over the last 20 years, IUC has always been absorbed.”

Vittal also said spectrum cost proposed for the next round of auction is very high and unaffordable to do 5G business. He said telecom industry needs to be vibrant and healthy to meet aspirations of Digital India programme.

“If investments don’t come in this industry, we will not meet the aspirations that Digital India has. In the last five years, the investment that has happened in this industry needs to be put back again in the next five years. Investment climate and investment must be attractive for investors. This means investors should get return on what they invest,” Vittal said, adding that telecom sector should be healthy enough to attract good talents.

To achieve the desired results, it is time to wear two hats — one for the company and the other for the country, he said, noting that telecom sector can bring in revolution if the stakeholders change their approach towards solving problems.

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