Reliance Jio has alleged that COAI’s internal rules and regulations are not fair and impartial and claimed that its voting process favor only three incumbent dominant operators (IDOs) namely Bharti Airtel, Vodafone and Idea, who allegedly command 68% of COAI’s total votes.
In a letter marked to Airtel’s Chairman, Gopal Vittal, and Director of COAI, Rajan Mathews, Jio stated that the key objectives of COAI which includes addressing common issues of member operators, acting as an interface between government and stakeholders, improving standards of mobile telephony and making it more affordable, and maintaining and upgrading quality of services are not fulfilled fairly are “overwhelmingly biased and lopsided” to favor the s three IDOs stated above. MediaNama has reviewed a copy of the letter.
Voting rights are ‘skewed’ to favor dominant operators: Jio
In addition, Jio’s letter has been marked to Vodafone, Idea, Aircel, Videocon, TRAI, Ministry of Communications and IT, claimed that only core members including licensed telecom operators of COAI have voting rights; other members like telecom manufacturers and VAS providers do not have any voting rights. Further Jio states that core member’s voting in the “Executive Council”—an internal authority in COAI empowered to take matters up with Ministry, or the regulator—depend upon a member’s Adjusted Gross Revenues with maximum number of vote per core member capped at 7.
Although each core member appoints one representative to the Council, every decision is taken up by a “simple majority,” alleged Jio. The three IDOs according to Jio have 60.84% of the market share based on revenues and command 7 votes, totaling to 21 votes, and therefore the entire decision making power and authority rests with three dominant operators alleged Jio.
“COAI’s Regulations are also in breach of the Societies Registration Act, 1860…There is no doubt that, COAI in the garb of an independent platform is being flagrantly misused by the IDOs to freely indulge in cartelization, abuse their dominant position, thwart competition, and act against public interest…voting rights are skewed in favor of the IDOs giving them absolute control to influence any or all decision of COAI,” Jio added in the letter.
Towards the end of the letter the Ambani-owned telco suggests an “overhaul” to COAI regulation and by appointing a committee considering of three retired Supreme Court judges.
Jio was a backdoor operator and yet we welcomed it: COAI
COAI’s Director, Rajan Mathews immediately responded stating that Reliance Jio entered the telecom industry as a “Back Door Operator (BDO)” and later joined the COAI in 2014. He added that Jio never applied for the UASL or UL license but acquired the BWA spectrum “through a front entity” and then converted to a “full blown UASL license” despite objection raised from several stakeholders including the CAG. “Despite all this skullduggery COAI welcomed Reliance Jio into the association and congratulated the new entrant on its launch,” Mathews added in his statement.
Mathews also accused Jio of being “slanderous, mischievous” for labeling established incumbent operators, while promising ‘suitably respond’ to Jio’s allegations after careful consulting with rest of the members. None of the new member operators who entered COAI in the past 5 years made any acquisitions against its own members, Mathews added.
Jio earlier agreed to the conditions and by-laws of the association: COAI
COAI had apparently presented the entire constitution, rules, bye-laws, while Jio had applied for a membership, and “was well aware of the governance structure and practices of the Association,” Mathews said. At that time, Jio did not raise any issue and agreed to follow the conditions presented to it; “It is surprising that Reliance Jio now raises certain issues as something new,” he added.
“We can only believe these are now motivated by a desire to tarnish the reputation and credibility of COAI in the light of certain representations made by COAI to various government agencies. COAI also wishes to state that any representation made is done after following all due processes of the association and with transparency on whether any member operator agrees or disagrees with the COAI position,” Mathews said in the statement.
Countering Jio’s claims about disproportionate voting tights in the COAI, Mathews explained that “it’s governance policies, and practices are completely democratic and that proportional voting is an established pattern of democratic voting,” see in democracies including India and the USA. He added that all companies follow the same principle o voting, “especially when shares are aggregated and voted by one or two majority stockholders.”
COAI and Jio had earlier clashed regarding interconnection
Earlier, in August the COAI had lashed out against Reliance Jio’s network trails that had onboarded 1.5 million ‘test subscribers’. The amount of traffic being generated from the Jio trials are “choking” Points of Interconnection “impairing” quality of service of other operators, alleged COAI in a letter addressed to the DoT. To this, Jio had reiterated in its letter to DoT stating that other operators, “instead of augmenting the PoIs, are blocking PoI augmentation, on various unreasonable grounds.” More here.