Airtel shares up 4% amid Jio charging 6 paise/minute for off-net calls

Bharti Airtel (NSE: BHARTIARTL) stock increased over 4 per cent in early trade on Thursday within hours after Reliance Jio announced regulatory changes under which it will charge 6 paise per minute for off-net calls (outgoing calls made to networks other than Jio). Bharti Artel's stock went up 4 per cent after it raised $750 million (about Rs 5,330 crore) from investors based in Asia, Europe and the US through a hybrid financial instrument. On the BSE, Bharti Airtel's stock was trading at Rs 375.40, up 4.5 per cent from its previous close. Bharti Airtel's stock was up 4.55 per cent at Rs 375.75 on the NSE.

Airtel raises $750 million

India's one of the largest telecom network companies also said that "its wholly-owned subsidiary Network i2i Limited, has priced ... offering of USD 750 million 5.650 per cent subordinated perpetual securities." Bharti Airtel said it will use the proceeds for refinancing, investments in subsidiaries and general corporate purpose. The securities have been distributed to fund/asset managers and insurance companies, a banker closely involved in the transaction said. A perpetual bond is fixed income security with no maturity date that yields a steady flow of interest payments.

Jio levies 6 paise per minute IUC on customers, what is Airtel’s take?

Reliance Jio on Wednesday said it will charge 6 paise per minute for voice calls made by its users to mobile phones networks of rivals like Airtel and Vodafone-Idea. While Jio blamed regulatory uncertainty caused by the Telecom Regulatory Authority of India (TRAI) reopening the issue of interconnect user charge (IUC), some call it 'U-turn' by Jio on its promise to give users life-long free calls. Jio says TRAI's IUC regulations require payments to rival networks for completing calls but added that it will compensate the users by giving free data of equivalent amount.

Jio now charges 6 paise per minute for calls to other networks, as IUC

This will be the first time that Jio users will pay for voice calls. Meanwhile, Airtel reacted to the move by saying TRAI had in September 2017 specifically mentioned that it will, if need be, re-visit the zero IUC regime plans. Last week, Airtel chairman Sunil Bharti Mittal extended his support to Huawei saying its products are "leading edge" and "superior" to rivals.

(With PTI inputs)