Source: Livemint.com, Sept 20, 2017
Mumbai: The Telecom Regulatory Authority of India (Trai) has cut interconnection usage charges (IUC) levied by telecom firms by 57%, adding that termination rates will be abolished in early 2020. While a cut in IUC was widely anticipated, the announced cuts are ahead of what the Street had expected.
This is a big win for Reliance Jio Infocomm Ltd. Analysts at Kotak Institutional Equities estimate Jio’s net spend on account of IUC to be in the region of Rs7,000-7,500 crore annually. Large incumbents such as Bharti Airtel Ltd, obviously, stand to lose a large chunk of this revenue stream, which contributes about 14-18% of their operating profits.