RIL Surges 4% After Telecom Regulator Slashes Interconnect Charges

Telecom operators to seek legal help against TRAI's IUC slashing

The move may see lower call charges as the telecom regulator has cut the rates paid by an operator for termination of mobile call on a rival network by nearly half from current 14 paise.

By 2020, the TRAI will phase out domestic call termination charges on mobile to mobile calls.

Termination charges are the charges payable by a telecom network where a call originates to the network where the call terminates. "Unless mitigated, this decision will have serious consequences for investment in rural coverage, undermining the Government's vision of Digital India", Official Spokesperson of Vodafone India said.

Reliance Jio said it is appalling that the incumbent operators have still gone ahead and made untrue and baseless allegations against the process for determination of IUC or the telecom regulator.

But Reliance Jio and Aircel, which are a little behind in the race will benefit from the new rates as now they'll be paying a lot less to other networks, which have more subscribers, for outbound calls from their networks. Trai believes that reduction of these charges would benefit the customers a lot. While Jio had been strongly seeking a cut in IUC in order to encourage new technologies and 4G, the demand had been countered by rival telecom players. The experts are also of the view that this move will also increase the competition between telcos. "It should have been implemented in 2014 as envisaged in the 2011 Report submitted by TRAI to the Supreme Court and will be six years too late", said Reliance Jio in a statement.

Global ratings agency Fitch said the cut in the interconnect user charges will lead to transfer of up to $600 million (roughly Rs. 3.859 crores) per year to newcomer Reliance Jio from the incumbent operators.

Analysts are forecasting another price war, following what has already been a tumultuous 12 months for the market since Reliance Jio emerged.

It's a regime that typically benefits the largest telecom operators. Apart from the immediate impact on EBITDA generation, the industry also faces the challenge of continuation of competitive intensity from RJio, given the headroom it has got from the IUC savings, says ICRA in the release.

A cut in IUC means Airtel, Vodafone and Idea will now need to recover a greater share of their costs from their customers, but leave alone being able to raise tariffs, they would most likely be forced to drop tariffs to counter Reliance Jio. But what is interconnection usage charges? With IUC gone, profitability for Airtel will be dented. The elimination of IUC will result in direct benefit to customers through lower tariffs.



Latest news

Catalan head says central government has taken over regional government
The province of Catalonia's headlong rush towards independence challenges the very roots of Spain's existence as a unitary state. Puigdemont reiterated his call for Catalans to "defend democracy" and to vote en masse in the referendum.

Trump wants to honor himself with a military parade on July 4
Trump was the VIP guest on the French president's viewing stand for a parade of French military troops and equipment. Seated beside the USA president, Macron said: "The strength that unites our relationship is that we say everything".

Hospital Removes Nurses That Called Newborns 'Mini Satans'
Joy Allen added: "As a former Navy daughter, Navy wife and mother of a child born at NAS JAX I am sicken by this behaviour". ABC affiliate WFTS reported that the photo is an image from a Snapchat account belonging to one of the employees.

CCleaner, distributed by anti-virus firm Avast, contained malicious backdoor
The bug affects anyone who downloaded CCleaner version 5.33 or updated their version between August 15 and September 12 . The company also added that the rogue server is down and other potential servers are out of the control of the attacker.

'Tez' designed to make e-payments simple, secure: Google
Support for the government-backed UPI ( Unified Payments Interface ) means the service is compatible with a number of major banks. The new mobile application enables you to send and receive money from friends by linking up your bank accounts to your mobile.

The Week 4 Coaches' Poll Top 25 Is Out
I flipped Oklahoma State and Ohio State in the eighth and ninth spots this week on the basis of the Cowboys' work at Pitt. LSU fell all the way from 12th to 25th after getting smoked by Mississippi State , 37-7, on Saturday evening.

Hurricane Irma hits Florida again, this time at the gas pump
Energy Information Administration , both hurricanes led to higher than average gas prices over the last couple of weeks. The decline in price is the first reported since August 21 when prices declined by three cents per gallon.

Rampant Manchester City looking more like a Guardiola team
This is the fifth League match for both of them, while Watford had two wins and two draws by playing four matches so far. We tried to sign one more during the market because we know some of the players here have had some problems in the past.

California lawmakers think they can get Trump to reveal his taxes
It prohibits law enforcement officials from asking about a person's immigration status or participating in immigration enforcement efforts.

Luke Shaw, Paul Pogba and Marcos Rojo Injury Updates
It is said the Belgium global was Jose Mourinho's first choice target from the start of the summer, after the Griezmann deal fell flat.

A 'Blade Runner' Anime is Coming From the Director of 'Cowboy Bebop'
We see a shadowy figure emerging from smoke and fire, and a hooded girl who is likely the protagonist of the short. The brief video above also offers a closer look at its test animation, concept art, and some actual footage.

NASA's Cassini spacecraft begins final approach to Saturn: See pics
Early on Friday, Cassini plunged into Saturn's atmosphere , but it sent back one final image before its destruction. As Cassini lost signals, flight controllers wearing purple shirts stood and hugged each other and shook hands.

Jose predicted to become tropical storm
After the Caribbean was left devastated by Hurricane Irma last week , there was worry that Jose could do further damage. The report added that "tropical-storm-force winds extend outward up to 115 miles from the center".

Baby No. 2 on way for Adam Levine and wife Behati Prinsloo
Maroon 5 is now prepping their new studio album while Prinsloo is gearing up for Victoria's Secret Fashion in Shanghai, China. To some, Behati's second pregnancy will not come as a surprise. "I'm an only child so I wanted like 10 kids.for sure".

Spain threatens 712 Catalan mayors with arrest for independence poll
In a survey by the Catalan Centre of Opinion Studies in July, 41.1 percent backed independence while 49.9 percent rejected it. Prime Minister Mariano Rajoy's government is increasing the pressure to prevent an independence referendum from going ahead.

Other news