Indian telecoms:Big picture beyond termination rates

The recent reduction in termination rates announced by the regulator of 58% to 6paisas from the current 14 paisas has not come as a big surprise as we were alreadybuilding for a 3 paisa decline in our base case for incumbent telcos. We believe themove will definitely hurt the near- to medium-term profitability of incumbent telcos andmore importantly will allow 4G-entrant Jio (not listed) to be more aggressive as itaddresses concerns over its near-term profitability. In our update report Indian Telecoms