Jio scores Indian termination charge win

Indian telecoms market disruptor looks set to get yet another win after the national regulator ruled termination charges be scrapped.

Jio has been grabbing huge chunks of market share in part by offering calls for free. Many of these calls will be to other networks such as Bharti Airtel and Vodafone, and the revenue they receive from connecting those calls has been one of the few sources of consolation for them as their margins have been savaged by the price war.

The very existence of Jio is symptomatic of a somewhat laissez faire approach by Indian regulators and the fact that it’s run by India’s richest man is, of course, a mere coincidence. Jio has lobbied the Indian regulator TRAI to reduce the amount its rivals are allowed to charge for termination, prompting desperate pleas to the contrary from its competitors.

The current mobile-to-mobile termination charge level is 14 paisa (hundredth of a rupee) per minute, but TRAI has ruled that will be reduced to 6 paisa per minute on 1 October (in less than two weeks) and abolished entirely by the end of 2019. It insists that all stakeholders have been fully involved in the consultation, but various reports indicate not everyone sees it that way.

In its lengthy paper on the matter TRAI justified the move by saying it will benefit consumers, encourage innovation, etc. It even cites the UK example of reduced termination rates as evidence of what a good idea it is. That may all be true but this ruling also seems likely to put Jio in an even stronger position than before and if its competitors start going out of business that’s unlikely to be for the greater good.