- Bharti Airtel’s shares reached a 19-month high of Rs 397, up 4 percent on Monday’s BSE, helping the telecom operator reclaim the market valuation mark of Rs 2 trillion.
- Reliance Jio (RJio) said last week that it would pay off-net calls for 6 paise per minute. The step, analysts believe, would be seen for the telecom companies as sentimentally optimistic.
Bharti Airtel shares reached a 19-month high of Rs 397, up 4 percent on Monday’s BSE, helping the telecom operator reclaim the market valuation mark of Rs 2 trillion. The market capitalization of the firm stood at Rs 2.02 trillion at 02:52 pm, BSE data showed.
For the fifth straight day, the stock traded in the positive area, touching its highest level since March 2018. It has rallied 16 percent in the past month, compared to a rise of 2 percent in the S&P BSE Sensex. During the period, the company saw the addition of Rs 27,662 crore to m-cap.
Reliance Jio (RJio) said last week that it would pay off-net calls for 6 paise per minute. The step, analysts believe, would be seen for the telecom companies as sentimentally optimistic.
Because of its possible free cash flow or FCF break-even status in FY20, Brokerage Motilal Oswal Financial Services (MOFSL) remains optimistic for the company. The step, it says, could also offer a great sentimental positive as it suggests positive trends and re-rate in telecom stocks given the credence to high expectations of growth in FY21 and beyond.
“The push by Reliance Jio to recover Interconnection User Charges (IUC) from customers points out that the telco aims to increase its average user revenue (ARPU) and now charges the voice call services provided free earlier. This will also give the industry’s incumbents space to boost their ARPU, “said CARE Ratings in an update to the telecom sector.
Although Jio believes IUC to be removed, the incumbents want IUC to remain. With this change, the industry seems to expect the IUC regime to proceed after January 2020. Nonetheless, what decision TRAI will take in light of market developments in the telecommunications industry remains to be seen, he said.
Recently, More than 350 million Reliance Jio users will now have to pay 6 paise per minute to interconnect usage fee (IUC) as India’s largest telecom company is expecting to recover these charges from their subscribers.
IUC is the fee paid to another mobile operator by one mobile operator when its customers make outgoing mobile calls to users of the other operator. These calls are known as mobile off-net calls between two different networks. IUC fees are set by India’s Telecom Regulatory Authority (TRAI) and is currently set at 6 paise per minute.