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Vodafone Idea shares rally after TRAI seeks to review deadline for zero IUC

Updated : September 19, 2019 11:04 AM IST

Vodafone Idea's share price rallied over 16 percent intraday on Thursday after the Telecom Regulatory Authority of India released a consultation paper to review the deadline to bring down the interconnect usage charge to zero.

Also, Vodafone Idea is the top telecom operator in India with the highest number of subscribers.

As of July, TRAI's latest subscriber data report, Vodafone Idea has 380 million subscribers.

The share price of Vodafone Idea jumped over 16 percent on Thursday after the Telecom Regulatory Authority of India released a consultation paper seeking to review the deadline to bring down the interconnect usage charge to zero.

At 09:55 am, Vodafone Idea's share price was trading higher by 10.31 percent to Rs 5.35 per share on the NSE. Intraday, the shares surged 16.49 percent intraday to Rs 5.65.

Trai's proposal will be positive for Bharti Airtel as well as Vodafone Idea but negative for Reliance Jio.

Also Read: Trai to review zero IUC deadline: What this means for telecom operators

According to Citi, the biggest relief will be for Vodafone Idea because the telecom operator earned 30 percent of its overall EBITDA in the first quarter from IUC.

Currently, an operator is required to pay 6 paise per minute as mobile call termination charges, called interconnect usage charges (IUC), which is proposed to be made nil from January 1, 2020.

However, this will be only seen as a temporary relief because at some point of time TRAI will move towards bringing termination charges to zero.

As of July, TRAI's latest subscriber data report, Vodafone Idea has 380 million subscribers followed by Reliance Jio with 339.8 million and Airtel with 328.5 million subscribers.

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