Telecom stocks jump on buzz of push for doubling call termination charge

Shares of four telecom companies rose 1.74% to 10.15% at 14:45 IST on BSE after report suggested that Bharti Airtel, Idea Cellular and Vodafone pushed for doubling of mobile call termination charge to recover cost.

Meanwhile, the S&P BSE Sensex was up 174.41 points, or 0.55% at 31,885.40.

Bharti Airtel (up 2.9%), Tata Teleservices (Maharashtra) (up 1.74%), Reliance Communications (RCom) (up 4.64%) and Idea Cellular (up 10.15%) gained.

The S&P BSE Telecom index had outperformed the market over the past one month till 18 July 2017, gaining 10.6% compared with Sensex's 2.11% gains. The index had also outperformed the market in past one quarter, gaining 14.04% as against Sensex's 8.16% rise. The index had, however, underperformed the market in past six months, rising 7.97% as against Sensex's 16.34% rise.

Shares of Bharti Infratel fell 1.23%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

Bharti Airtel and Idea Cellular reportedly yesterday, 18 July 2017, sought doubling of interconnection usage charge (IUC), a key input for mobile rates, saying that incoming calls to their networks cost 30 paise per minute to complete.

Another incumbent, Vodafone, projected the cost at 34 paise, more than double the current level. Any change in IUC has a direct impact on mobile call rates as the charge is taken into account while setting telecom tariffs.

Telecom operators get the interconnection charge for every incoming calls from networks of other operator. It is included in call rates paid by mobile subscribers. The IUC is fixed by the Telecom Regulatory Authority of India (Trai). At present IUC of 14 paise per minute is levied on every incoming calls.

The Aditya Birla group firm demanded that IUC should be raised so that telecom operators are able to recover cost of carrying load of incoming calls from other networks.

Meanwhile, Union Minister Manoj Sinha reportedly said today, 19 July 2017 that the new telecom policy is likely to be announced before March 2018 which will focus on 5G technology ecosystem, data security and privacy and other key areas in the sector.

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