According to CLSA, Jio’s IUC charge is likely to pressure TRAI to abolish the tariff
The movement followed Reliance Jio's announcement that they will be charging an Interconnect Usage Charge (IUC) from customers for calls made to the other networks.
IUC is a cost paid by one mobile telecom operator to another when its customers make outgoing mobile calls to the other operator’s customers.
The charge is fixed by the Telecom Regulatory Authority of India (TRAI) and is currently at 6 paise per minute.
According to CLSA, Jio’s IUC charge is likely to pressure TRAI to abolish the tariff. Further, if Bharti Airtel and Vodafone Idea maintain their tariffs, the FY21 EBITDA will be 2-11 percent higher.
The benefits of the current move for incumbents is unclear and remain cautious on Bharti Airtel & Vodafone Idea, said Jefferies.
However, Edelweiss has maintained buy on Bharti with a target at Rs 414 per share and hold on Vodafone Idea with a target price at Rs 7 per share.
At 09:34 hours, Vodafone Idea was quoting at Rs 6.54, up by Rs 0.70 or 11.99 percent and Bharti Airtel was quoting at Rs 378.50, up by Rs 19.25 or 5.36 percent on the BSE.
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