Reliance Jio files tariffs with Trai, maintain quality is challenge

Reliance Jio, the telecom venture of Reliance Industries, has filed tariffs with the sectoral regulator Trai even as existing telecom operators said that there is a challenge before the new entrant to maintain quality of service on its network once the traffic volumes go up.

“The tariffs have been filed with the Trai. No approval is required, and the regulator will intervene in case there is a deviation from the existing guidelines,” sources said.

Reliance chairman Mukesh Ambani on Thursday, while announcing his firm’s entry into telecom venture, said free voice calls and free national roaming along with rock-bottom data prices are available on its new network.

While telecom analysts described the low tariff as disruptive attempt by Reliance, incumbent telecom operators said Reliance Jio’s offer was a “compelling proposition” and good for consumers, but its tariffs cannot be termed as “killer” that will do away with competition.

Cellular Operators Association of India (COAI) Director General Rajan S Mathews said Reliance Jio’s challenge will be to maintain quality of service on its network once the traffic volumes go up. Consumers will not pay low prices for low quality, he pointed out.

The COAI, which has existing leading telecom firms including Airtel, Vodafone and Idea as its members, is leading the front in a fight with Reliance Jio over inter-connect issues. Incidentally, Reliance Jio is also a part of the cellular association.

While welcoming Reliance Jio, he said the COAI will continue to advocate fair competitive practices with an enabling policy and regulatory environment which translates into a win-win for the industry and consumer. A stable, predictable, long-term and orderly growth of the industry is essential for a fully connected and digitally empowered India, he said.

On allegations that incumbent operators had not provided enough points of inter-connect during the test phase, Mathews said the operators had met their obligations on their understanding of the network load and provided capacities for up to 20 million users.

Stocks tank as RJio announces plan

Incumbent telecom operators including Bharti Airtel, Idea Cellular and Reliance Communications have already started feeling jitters about Reliance Jio. Stocks of these companies fell between 5-10% after the announcement by Mukesh Ambani at RIL AGM that Reliance Jio will be launching on September 5 with free lifetime unlimited calling and data tariffs as low at Rs 50/GB.  Aditya Birla group controlled telecom company Idea Cellular was the top loser in the telecom pack, ending down nearly 11% at Rs 83.25 with losses in market capitalisation of over Rs 3,500 crore. Bharti Airtel’s shares were down 9% in intra-day trades before recovering and ending the day with losses of 6.5% at Rs 310.15 on the NSE.