Reliance Jio’s push for interconnect usage fees a boon for Airtel

NEW DELHI : Reliance Jio’s move to introduce interconnect usage charges, or IUC, could end up benefiting rival telecom operator Bharti Airtel because of a perfect storm of several factors coming together, analysts said.

First, as many as 22.3 million ‘heavy voice users’ left Jio’s network after it introduced an IUC charge of 6 paise per minute on 21 October.

Second, the Ebitda, or earnings before interest, taxes, depreciation and amortization, gains reported by Jio in the December quarter of FY20 were largely led by the IUC charges. Third, the elimination of millions of smartphone users, in tandem with the addition of Jio Phone users (due to a discounted offer on the Jio’s entry-level device) could put pressure on voice and data usage growth.