But Jio’s move, they said, could discourage users from calling subscribers of other telcos, resulting in lower voice traffic, and in turn, restrict its actual Ebitda<\/a> upside at 8-10%.
India Ratings & Research, a Fitch Group company, estimates Jio’s IUC recovery move will improve its ARPU -- a key performance metric -- by about Rs 9 (per month), although brokerage Kotak pegs sharper growth at Rs 15 per user per month.
From a peak of Rs 156 in the September quarter of FY18, Jio’s ARPU has shrunk steadily to Rs 122 over the past seven quarters. What’s more, Axis Capital has estimated it could dip 3% sequentially to Rs 118 in the September quarter, driven by additions of marginal JioPhone users generating modest monthly ARPU of Rs 99 and cash backs on digital recharges. But the Axis estimate had come in before Jio’s latest IUC move.
Small wonder, Care Ratings said “Jio’s move to recover IUC from customers indicates the telco’s aim to increase ARPU and now charge for voice call services, provided free earlier”.
Further, the ratings agency said Jio’s move would “provide room to incumbents” to also improve their respective ARPUs.
India Ratings though said Airtel and Vodafone Idea could see “lower incoming calls on their networks, which may impact their net IUC income” in future.
IUC is a charge paid to the telco on whose network a call terminates. It has been a bone of contention among private carriers and telecom sector regulator, Trai. Jio is now a net payer of IUC, while Airtel and Voda Idea are net IUC revenue earners, based on voice traffic flows.
Meanwhile, Airtel and Voda Idea took the social media war against Jio up a notch, asking users to move to their networks as they, unlike Jio, were not charging 6 paise a minute for outgoing calls to other telco networks.
Airtel came up with the #AbTohSahiChuno campaign as part of which it wrote, “For some, unlimited calls means something else. For us, unlimited calls have truly meant unlimited calls. Switch to Airtel now.”
Vodafone and Idea in their respective Twitter posts have taken digs at Jio too, where Idea wrote “Free calls on unlimited recharges. We truly mean it.”
But hashtags like #NoMoreIUC were also trending on Twitter, clearly in support of Jio’s latest move, while slamming the telecom regulator over its indecision over scrapping IUC.
“It’s time to unite over this IUC by signing a petition so that Trai can scrap it,” was among the posts on the micro-blogging site under the #NoMoreIUC counter-offensive.
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