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Vodafone India Takes Dig at Jio, Says TRAI Should Not Favour New Entrant

Vodafone India Takes Dig

Vodafone India Takes Dig

Vodafone India Takes Dig:  Together with the inter-ministerial group (IMG) on telecom expected to submit its recommendations shortly, Vodafone Group CEO Vittorio Colao has urged the Indian authorities to decrease interest rates on deferred spectrum payments and appealed that mobile termination costs (MTC) be not reduced further. Without naming Reliance Jio, Colao also stated TRAI shouldn’t favor new entrants.favour new entrants.

In a letter dated August 22, a copy of which is available with IANS, Colao has written to Communications Minister Manoj Sinha saying that: “We hope that the IMG will suggest a reduction in the interest rates for deferred spectrum obligations to 6.25 percent in line with the enhanced macro economic tendencies and a rise in the amount of repayment for spectrum.”

The business said it has spent over Rs. 13.40 crores from India to build its own mobile network. The letter said: “On cell termination charges, we are seriously alarmed to find reports which the Regulator is considering a decrease in MTC in a time once the industry is facing such immense hardships. Any reduction in MTC risks large-scale site shut-down of already unprofitable websites in rural India and which would greatly diminish the general population coverage of cellular telephony.”

Vodafone India Takes Dig

Taking a dig at Reliance Jio, he said: “There’s an opinion being propagated by the new entrant that as a 4G-only operator, it has a cost advantage in the area of 70 percent when compared with the established 2G/3G/4G operators. There is not any evidence – either international or Indian – to support such a claim.”

“It’s also apparent from the TRAI (Telecom Regulatory Authority of India) business workshop on MTC, that Reliance Jio has supposed continued growth of an implausible level of paid traffic on its network. On the other hand, the traffic levels are a consequence of action that is intense and generated by incurring losses.

“Reliance Jio can be supposing that it can recover its costs a long time into the future. But, continued under-pricing of services results in a rapidly rising price per subscriber, recovery of that will require higher ARPUs in long run, which is unrealistic.

Vodafone India Takes Dig: The endeavor of the IMG is to analyze issues and provide recommendations for resolution of assets that are stressed. The team, comprising officials in the Telecom and Finance Ministries, was set up following banks expressed concern in the business about stress.

“We request your urgent intervention to protect the future of the telecom sector and ensure that there should be no additional reduction in MTC since it would destabilise the sector, defeat government’s rural policy objectives and cause huge inconvenience to citizens, particularly, in rural India,” Colao said.

He added: “We emphasise our long term commitment to the authorities vision of Digital India and request your urgent intervention and consideration of our preceding submissions.”

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