Reliance Communications’ CEO Gurdeep Singh said during a recent analyst call that the current interconnect usage charge (IUC) of 0.14 paise per minute for wireless-to-wireless calls “should be reviewed and scrapped by the government.” As per current regulations, RCOM will have to pay 0.14 paise per minute to Airtel, every time an RCOM user makes a call to another user on the Airtel network. But since telcos have started providing cheaper or even free calls, RCOM expects a rise in voice usage, leading to more IUC payouts to other telcos, and not necessarily the same amount of return. Singh also pointed out that the telecom industry has shifted from being a tariff-based business to “a capacity and a volume-led play” wherein “the pricing structure is getting transferred from per minute or a per MB to ARPU-led structure,” he added. According to him, ARPU-led plans being offered by RCOM like the Rs 149 pack with unlimited calling and 300MB data is “aimed at consumers who have large voice needs and have a smaller data requirement”. Singh added that around 50% of the consumers fall under this bracket since they generate an ARPU of Rs 150 monthly. He expects these plans to profitable “at the current IUC level” but at a lower margin of return. Why RCOM shut down its profitable CDMA segment The company’s suffered a net loss of Rs 531 crore during Q3FY17, compared to a profit of Rs 38.8 crore in the preceding quarter. Singh said that a significant…
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