Telecom companies declare war on free-calling app Ringo; all gaming the system, says Sunil Mittal

NEW DELHI: Scrapping of connection fee for calls made from fixed line phones to any phone may have made them cheaper, but it has led to calling apps like Ringo “gaming this system” to hurt operators, telecom czar Sunil Bharti Mittal said.
Apps like Ringo offer rates at a fraction of prevalent charges to connect calls using a kind of automatic conference system using landlines.
“They (Ringo) connect two mobile phones and no termination charges are paid by either side. So, they are gaming this system,” he said at a COAI-Ericsson event.
Ringo, which yesterday suspended domestic calling services, couldn’t be immediately reached for comments.
The cost of calling using Ringo at 19 paise is about 90% cheaper than what is offered by mobile operators.
This puts further pressure on telecom companies which are already facing challenges in voice business as consumers switch to messaging apps like WhatsApp that offer free voice calls.
Mittal expressed his concern in the presence of telecom minister Ravi Shankar Prasad.
Asked to comment on Mittal’ s statement on the issue, Ringo chairman and CEO Bhavin Turakhia told PTI, “Ringo is fully compliant with all regulations of Trai and DoT. We are providing a service that any operator can themselves provide.”
In February, regulator Trai had scrapped network inter-connection charges a landline service provider had to pay to other service provider for transmitting its customers’ phone calls.
The move was aimed at helping fixed line services gain traction as state-owned companies face tough competition from mobile services of private players such as Bharti Airtel, Vodafone and Idea Cellular.
“If you need fixed line, you need to incentivise it. Taking away the termination charge agreement, you made it zero. I think it is a great move, but it has had some unintended consequences,” Mittal, chairman of Bharti Enterprises, said.
“It was meant for MTNL, BSNL and fixed line operators, but there are services coming around this to arbitrage all these termination charges.”
Ringo, which maintains that its services are legal and compliant with regulations, said it is working on a “favourable resolution in due course of time”.
In spite of being fully compliant with the law, “the service allegedly seems to have been blocked on November 30 without any notice to our service providers”, Ringo said in a blog.
It added that its international calls will continue to work as these are without any issues. The company had launched the international voice calling service in January, which is now available in over 100 countries.