JioPhone will further erode the revenues of telecom operators: Report

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The country's second largest telecom operator Vodafone expects that JioPhone will further erode the revenues of telecom operators.

JioPhone will further erode the revenues of telecom operators: Report

According to the report in PTI, the company has written a letter to the Telecom Commission Member (Finance) Anuradha Mitra, in which the company said that "This is likely to cause further erosion in revenue for existing operators."

The company said that it has reported the constant decline in its revenues from telecom services and it has recorded further decline of 3.41 percent in the quarter ended June 2017.

To recall, Mukesh Ambani owned Reliance Jio has recently launched new feature phone or intelligent phone i.e Jio Phone. The new phone will target 50 crores feature- phone users in the country and it will offer free voice calls and SMS to customers.

Vodafone also "requested DoT to consider the recommendation of the Telecom Regulatory Authority of India (TRAI) for reducing Universal Service Obligation Fund from 5 percent to 3 percent as private operators have already rolled out services in rural areas and current call termination rates are very low," the report added.

"...despite having rolled out in rural areas, we still have to pay USO, and the mobile termination rates are also below cost which adversely impacts us since the majority of the calls in the rural areas are incoming," the letter said.

Currently, telecom companies charge 14 paise for every incoming call that it gets from the network of other operators. "Therefore, we earnestly request kind consideration and early decision on reduction in the USO levy from 5 percent to 3 percent and reduction of interest charges along with rescheduling the payment period, which has been tabled before DoT and IMG (inter-ministerial group)," Vodafone further said in the letter.

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