Thread by @caswapnilkabra

Reliance Jio making off-net voice calls free, is positive for Vodafone Idea as it is a net payer of IUC and it has a low market share.
A super easy thread to help a layman understand the concept of IUC (Internet Usage Charges) and also AGR (Adjusted Gross Revenue). 👇🧵

1. ‘Raju’ is a ‘Vodafone’ user and he calls his friend ‘Vivek’ who uses the services of ‘Jio’. Now when Raju calls Vivek, his operator (Vodafone) will charge money for connecting to the other operator (Jio).

2. Now please note that the money collected by Vodafone from ‘Raju’ is actually owed to Jio. Hence, Vodafone will transfer the money to Jio. This is called as IUC (Interconnect Usage Charge).

3. Now, the amount collected by Vodafone is its revenue but in true sense it is not the money retained by it, as it has to transfer it to Jio.

4. Hence, the revenue of Vodafone will be adjusted and deducted to the extent of IUC paid to Jio and Jio’s revenue will be adjusted and increased to that extent.

5. Hence, the term AGR : 'Adjusted' Gross Revenue is used and not just Gross Revenue.

#VodafoneIdea #RelianceJio #investing #investors

@OnkarThonte, @darshanvmehta1, @_anujsinghal