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Update: Airtel, Idea to add more points of interconnect to handle calls from Jio’s network

Idea umbrella

Update: Following Idea’s pledge for points of interconnect, Airtel said that it will be providing additional points of interconnect to handle calls from Reliance Jio. Airtel said that with its upgrade, it will be able to serve 15 million customers but did not give out a specific number of POIs. It however said that it would be increasing POIs three times of its current numbers.

Earlier: Telecom operator Idea Cellular will be adding 196 points of interconnect (POIs) shortly in order to handle 1.85 million more customers from Reliance Jio where calls originate. “This additional capacity will provide for a buffer of 119% against the August subscriber volumes,” Idea said in a statement.

The company said that in August 2016, there were 2.97  million Jio subscribers who ended calls on Jio’s network. “Our current allocation of POIs would in normal circumstances cater to 4.65 million such subscribers indicating a buffer of 57% in calling capacity,” Idea added.

Reliance Industries chairman Mukesh Amabani last month announced that all voice calls from Jio’s network would be free. At the same time, he sounded a warning to existing telecom operators and said that they must not use their existing dominant position and ensure that there is fair play with new entrants in the telecom business. He added that 5 crore calls from Jio’s network were choked due to interconnect issues.

Idea, the third largest telecom operator in the country, said that there was an unprecedented asymmetry of traffic of 14.5 times between Jio and their network. “Never, ever, has such a high asymmetry been observed with a new operator in the past,” the statement added.

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The company said that it has submitted to TRAI that its real cost of termination is significantly higher that the current charge of 14 pase per minute under the current interconnect regime.  “The Company is incurring increasing costs due to this high level of traffic asymmetry. Unless controlled, this induced traffic asymmetry is expected to exacerbate the loss in the coming months,” it added. 

Idea financials

For the quarter ended June 30 (Q1 FY17), the company reported  1.8 million customers who are using 4G. The company had reported to 680,000 users the company reported in the preceding quarter. Gross revenue stood at Rs 9,486.6 crore, an increase of 7.9% from Rs 8,791.5 crore in the same quarter last year.

Net profit, however, fell significantly by 36.1% to Rs 497.1 crore compared to Rs 777.8 crore in the same quarter last year. Idea attributed the fall in net profit to renewal of nine existing expired license & linked spectrum & acquisition of new spectrum.

Cutting data tariffs

In July, Idea reduced the tariffs of its prepaid 2G, 3G and 4G internet packs across all circles. Changes that Idea has made:

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– Idea’s 2G pack for Rs 19 and offering 75MB for 3 days validity will now provide 110MB instead
– The 3G/4G pack costing Rs 22 for 65MB of data for 3 days will provide 90MB 3G data for the same validity.

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