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Zero IUC rates at zero would make it easy for new entrants, says Rajiv Sharma of SBICAP

Updated : September 19, 2019 12:49 PM IST

The telecom regulator's move to review the deadline for the effective date of the interconnection usage charge may bring short-term relief for Bharti Airtel and Vodafone Idea but in the long term, it will depend on the market share, said Rajiv Sharma, SBICAP Securities.

“Give that the termination rates were supposed to come to zero based on the premise that largely it will be LTE traffic and it will be equal among all operators or on similar lines, so that may have prompted them to revisit before they go down to the zero termination regime,” said Sharma.

"One should also note that we are moving to an industry structure which is consolidated and the moment the IUC rates become zero, it would be easy for new entrants to come in. So, having some kind of termination rates will keep the entry barriers higher," said Sharma.
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