Reliance Jio in Fresh Battle with COAI

Calls the industry body biased and accuses it of serving the interests of the top three telcos

The industry body hit back by evening and termed Jio as a back door operator (BDO) in the telecom sector, as it was never an applicant for UASL or UL license but bought broadband wireless spectrum through a front entity and then had it converted into a full-blown UASL license. The war of words began on Sunday as Jio called the leading three telcos as incumbent dominant operators (IDOs) and accused COAI to be serving their interests, while reducing the other core members to nullity.
The ongoing tussle between Cellular Operators Association of India (COAI) and Reliance Jio got murkier on Sunday, with Jio calling the industry body biased and accused it of serving the interests of the top three telcos, namely Bharti Airtel, Vodafone and Idea.

"None of the half a dozen new operators who have entered in the last five years have ever accused COAI or in fact labelled the leading operators as IDO's. Despite repeated and grave provocations from Reliance Jio, COAI wishes to state that Reliance Jio which entered the sector as a BDO was welcomed by COAI as a full member," COAI Director General Rajan Mathews said.

Jio has also sought a thorough overhaul of COAI regulations by appointing three retired judges of the Supreme Court so that the industry body falls in line with democratic principles of fairness, accountability and transparency. Jio has been a core member of COAI since July 2014.

Regarding the issues raised by Jio, COAI said these are private, internal matters of the association and hence will be dealt with internally among its members. Jio is a member and this is a matter, that can easily be discussed at the association. Questioning the rules and regulations of COAI, Jio said as the three IDOs command 68 per cent of votes and any decision, including those relating to grievance of a core member are subject to simple majority which is under simple control of IDOs.

"COAI regulations are overwhelmingly biased and lopsided and have been framed to sub-serve the vested interests of three IDOs," Jio said in the letter dated September 23 to its Chairman Gopal Vittal and Director General Rajan Mathews.

However, COAI said Jio was presented with the constitution and by-laws of the Association, pursuant to their application for membership and was well aware of the governance structure and practices of the association.

"No issues were raised at this time and they agreed to abide by these rules and regulations. It is surprising that Reliance Jio now raises certain issues as something new," COAI said.

COAI further said it believes 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.

"The members of COAI will review the letter submitted by Reliance Jio and do what they believe is in the best interest of the country, the customers and the association," it added

Jio in the letter said three IDOs have 60.84 per cent market share based on revenues and command seven votes each, totaling 21 votes whereby the remaining four core members have a total of 10 votes amongst them.

"The entire decision-making power and authority rests only with the IDOs. The other core members have been reduced to a nullity and their presence or not will always be inconsequential," the letter said.

"One vote - One member" is the basic tenet for good governance of any association such as COAI, Jio added.

Citing a few instances, Jio said COAI had sent important communications such as views on interconnect usage charges (IUC) without having any debate and consensus amongst core members just by recording views of IDOs.

"This is a clear case where COAI as a body purportedly representing the interest of all the members sending out a view which will benefit only the IDOs," Jio said.

The company further said as a matter of fact, on a specific occasion, COAI had the audacity to send a mail (containing a draft letter purportedly supposed to be sent to the Government) to it to seek its views whereas the letter had already been sent to the Government even before the mail was sent to Jio.

"The COAI, in utter disregard of its charter and the mandate and powers conferred by the charter on the members and its officials went out of its way and command to take up the issue of provision of points of interconnection from the IDOs to Reliance Jio, espousing the IDOs' views as that of COAI's views, and in effect supporting the illegal acts of IDOs against one of its own core member," Jio added.

Jio sought that if there's no consensus, the communication should be voted upon and finally when the communication is sent, it should contain clearly the views of the dissenters along with that of the majority views.

"In all fairness, any dissenting views, even if it is in minority, should be recorded with the full reasons given by the dissenter. The dissenting views should also form part of the communication to the Government and Regulatory Authorities," Jio added.

It further suggested that COAI's rules and regulations should be overhauled so that its processes and procedures to fall in line with Public Law and to follow democratic principles of reasonableness, fairness, accountability and transparency.

Reference - http://www.business-standard.com/article/companies/reliance-jio-in-fresh-battle-with-coai-116092500803_1.html