Skip to content
Subscriber Only

Billionaire’s India Telecom Unit Boosted From Connection Fee Cut

  • Regulator slashes rate, says it will drop to zero by 2020
  • Airtel, Vodafone oppose cut, say it’ll add to industry stress
Mukesh Ambani

Mukesh Ambani

Photographer: Simon Dawson/Bloomberg

One year after storming into India’s mobile phone market with free data and voice services, billionaire Mukesh Ambani’s telecom unit is gaining momentum against its bigger rivals via a regulatory decision to lower interconnection fees.

The reductions that begin Oct. 1 will probably bolster Reliance Jio Infocomm Ltd.’s earnings by 76 percent in the year ending March 2019, Morgan Stanley analysts Parag Gupta and Amruta Pabalkar estimate. Jio had to pay 21 billion rupees ($326 million) in interconnect fees in the quarter ended June 30, according to the Morgan Stanley note dated Sept. 20.