Reliance Jio set to lose out on Potential Revenue from 2020 Because Of IUC Scrapping

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Jio takes a lead and left behind the Airtel and Vodafone Idea to become the new leader in the voice minutes market, with a 36% share, while Airtel (33.5%) and Vodafone Idea (30.7%).

This change in rank means the Mukesh Ambani’s Jio will lose a potential revenue opportunity which comes as a result of the scrapping of interconnect usage charges (IUC).

The Reliance Jio has become the top telecom operator by revenue market share (RMS), and it is now on the course of becoming the revenue net gainer with the current IUC regulations. It is also the case that most calls will terminate on the Jio 4G network and this would be because of Jio’s leadership in the voice minutes and the continuous increase in market share.

The Telecom Regulatory Authority of India (TRAI) had reduced the IUC by 57% down to 6 paise back in 2017 but, now the TRAI is scraping these rules in 2020. This directly means that Reliance Jio would not have anything to gain from this as Airtel and Vodafone Idea would not have to pay interconnect usage charges. Just to tell to in case you don’t know, IUC is paid by the call originating telco to the destination operator.

After the TRAI took the decision back in 2017 regarding the change in IUC regulations, Bharti Airtel, Vodafone India, and Idea Cellular opposed the new rules and TRAI and Reliance Jio supporting the new rules.

During that time other telcos who cross the 60% of subscribers and having most calls ending on their network had to pay increased IUC. And at that time, Reliance Jio was a small player in comparison. But in September 2018, Jio’s minutes market share had gone from 27.2% to 35.74%, whereas Airtel and Vodafone Idea’s share went from 35.4% and 37.33% to 33.5% and 30.74% respectively.

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