The timing of Telecom Regulatory Authority of India’s (Trai) decision to cut interconnection usage charges (IUC) is impeccable as far as Reliance Jio Infocomm Ltd is concerned. Deliveries of its new feature phone are expected around the same time—some news reports suggest the delivery date has been pushed to 1 October.
When the company announced its feature phone pricing plan two months ago, tariffs had seemed a tad high for the segment. The IUC cut can help correct this anomaly.
“We do not see Jio being able to penetrate the mass market with the announced (feature phone) offer, as we see the monthly price of Rs153 and Rs1,500 initial deposit as still being steep for low-income consumers,” analysts at Bank of America Merrill Lynch had written in a note to clients in July.
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