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Reliance Jio Infocomm’s (RJio) decision to pass on Interconnect Usage Charges (IUC) to its users is likely to be followed by tariff hikes, according to a note issued by brokerage firm Emkay.
“We believe competition will follow suit, with tariff hikes for their bundled plan subscribers, which should result in an Average Revenue Per User (ARPU) increase of Rs 7 and Rs 4 for Bharti and Vodafone-Idea, respectively,” Emkay’s note to shareholders said.
“RJio, on the other hand, will witness an ARPU increase of about Rs 17 following the move,” it added.
ARPU is a metric to gauge the financial strength of a telecom company.
On Wednesday, in an unprecedented move RJio decided to charge 6 paise per minute for calls to rival networks. The Mukesh Ambani-led company was actually passing on the IUC charges to the subscriber
ALSO READ:- RJio to charge 6p/min for calls to rival networks
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