Once arch rivals, Vodafone, Bharati Airtel and Idea Cellular have now teamed up against Jio and complained to the government that latter’s predatory pricing has been eating up in their revenues. To make sure, the government pays heed to their outrage, the three telecom operators claimed their incompetence to invest in future technology and create jobs.
The top players in the industry had met a government panel, which aims to analyse the losses in the industry. Mukesh Ambani backed Jio has been accused of providing cellular services at ‘too low’ a cost, which is responsible for decline in the revenue generation.
According to a Times of India report, the worst affected Airtel, which has seen a severe contraction in profitability post the aggressive launch of services by Jio in September last year, said that the return on capital employed (ROCE) had dropped down to "perilously lower levels" and is "highly likely to be negative" if relief is not provided. Airtel said losses to the industry will also restrict the government's ability to earn from the sector. Its earnings will come down by Rs 10,000 crore. "Consolidation/ reduced investments will result in loss of direct/ indirect employment."
The companies have sought to increase charge for terminating a call on their networks to be increased from the existing 14 paise per minute. "The IUC rate of 14 paise is lower than actual cost. In order to make this financially viable, it is critical that traffic between operators is symmetrical," Airtel told TOI.
"IUC needs to be correctly determined to prevent predatory voice-pricing environment. Aggressive tariffs in voice and data have resulted in a scenario of pricing below cost with every operator," Idea told TOI, seeking the fixation of a floor price for voice and data prices.
However Jio has refused to the allegations. It believes that lack of investments by them in new technologies and mounting debt are making the other rivals outrageous.
