According to a recent report by Credit Suisse, the elimination of inter-operator interconnect usage charges (IUC) charges may result in certain EBITDA gains for Vodafone Idea, deliver some impact for Jio, and is expected to be mostly neutral for Airtel.
The zero IUC regime was supposed to come into effect starting January 2020, however, its implementation was then deferred to January 1, 2021.
IUC is a charge paid by a telco to another operator when its customers make voice calls to subscribers of the rival network, and these charges stood at 6 paise per minute.
A few days back, Reliance Jio that all calls from Jio, to any network, anywhere in India will be free starting January 1, 2021.
Credit Suisse highlighted that as per TRAI’s data from year ago, Jio’s share of off-net incoming calls was increasing.
Also, the ratings agency noted that Jio has capped off-net outgoing calls and also gained subscriber market share while Vodafone Idea has lost market share.
As a result, Jio has now become a net receiver of IUC while Vodafone Idea has become a net payer. As for Airtel, the mix is roughly balanced now.
