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MOSL: Morning India (18/December/19): 1. Telecom (TRAI defers zero MTC regime; floats consultation paper on tariff); 2. EcoScope; 3. Agriculture

MOrning India (18/December/19): 1. Telecom (TRAI defers zero MTC regime; floats consultation paper on tariff); 2. EcoScope; 3. Agriculture

 

Today’s top research idea

Telecom: TRAI defers zero MTC regime; floats consultation paper on tariff

• The Telecom Regulatory Authority of India (TRAI) has made key announcements on (a) termination charge and (b) consultation paper on tariff fixation.
• Following a two-month consultation process, the regulator has announced deferment of zero termination charge - bill and keep (BAK) regime - by one year to Jan'21.
• Bharti/VIL have net MTC gain of ~INR2.5b/3.5b and thus stand to gain ~2%/10% on FY21 EBITDA. On the other hand, RJio might see a 4% negative impact on EBITDA. However, this will be limited to FY21.
• The TRAI also floated a consultation paper on fixing a floor price for tariffs. However, the narrative gives limited confidence toward changing its current forbearance policy and any regulatory intervention. Further, this may create a price ceiling which could be counterproductive.

Piping hot news

Trai defers zero-IUC regime for a year, to take effect from January, 2021

Trai Tuesday deferred the implementation of the zero-interconnect usage charges (IUC) regime by a year till January 1, 2021, and separately sought stakeholder views on whether it should set a floor and ceiling for voice and data tariffs, even as it termed the proposal ‘anti-consumer’.