Reliance Jio has started charging for voice calls made to subscribers of other telcos to account for interconnect usage charge (IUC) it pays its rival network. This decision can have a cascading effect in pushing up tariffs indirectly and finally ending the era of free voice tariffs.

However, customers who recharged their phones till October 9 will continue to enjoy the benefits of free voice calls to any number until their existing plan expires.

An important update for all Jio users. pic.twitter.com/TR04y92wmC

Advertisement

— Reliance Jio (@reliancejio) October 10, 2019

Jio had earlier announced that all calls to a non-Jio mobile phone number like that of Airtel and Vodafone Idea will be charged at the rate of 6 paise per minute. This is for the first time that users will have to pay for making a phone call from Jio.

On Wednesday, billionaire Mukesh Ambani’s Reliance Jio flagged the regulatory uncertainty over the review of sunset clause for call termination charges and announced it will charge customers 6 paise per minute for voice calls made to rival phone networks but will compensate users by giving free data of equal value. Jio had said the 6 paise charge will remain in place till the time telecom operators are required to pay rivals for mobile phone calls made by their users to other operators’ networks.

“While there are several uncertainties that arise, overall we see this as a positive development for the sector, with potential revenue and Ebitda (earnings before interest, tax, depreciation, and amortisation) upside of 10-12 per cent and 35-45 per cent assuming traffic patterns of first-quarter since this move will result in higher outgo from the customer,” UBS said in its report.

To make calls to other non-Jio numbers, you need to buy new IUC top-up vouchers which have been made available. The vouchers begin from a price of ₹10 and go up to ₹100. Each voucher of ₹10 will give you 1GB of free data. Jio’s postpaid customers will also be similarly charged for voice calls at the rate of 6 paise per minute. They will also be compensated in the form of free data.

Since voice calls on Jio network are free, highly charged 35-40 crore 2G users of rival networks end up giving missed calls to its users to trigger callbacks that have resulted in a payout of ₹13,500 crores to Bharti Airtel and Vodafone-Idea in last three years, Reliance Jio said adding that to recover the losses created by the TRAI move, the company has decided to charge customers 6 paise per minute for every call they make to a rival’s network.

There is also the possibility of the regulator aborting any decision to postpone zero IUC (interconnect usage charge) and implement the original plan, said by an investment banking company, UBS. “It also remains to be seen whether Bharti and Vodafone Idea Ltd follow Jio in introducing similar charges for off-net calls, although we see a high chance they follow Jio,” it added.

(With input from agencies)