Tuesday, March 19

Jio becomes second largest Indian telecom operator, profit zooms 45.6% to 891 crore

Reliance Jio becomes India’s second largest telecom operator in subscriber base posted 45.6 percent rise in net profit for June quarter of 2019-20 to Rs 891 crore, and said the beta trials of its much anticipated ‘JioGigaFiber services’ is in the final lap.

Reliance Jio raced past Bharti Airtel to become the second largest mobile operator, as per May 2019 data released by telecom regulator TRAI.

For the first quarter ended June 30, Reliance Jio’s operating revenue stood at Rs 11,679 crore, up 44 percent over the year-ago period. Jio’s subscriber base stood at 331.3 million as on June 30, 2019.

The June quarter net profit at Rs 891 crore was 45.6 percent higher over the year-ago period and 6.1 percent increase when seen sequentially. The company has recorded profit after tax of Rs 612 crore in the Q1 FY19, and Rs 840 crore in Q4 FY19.

“Growth in Jio mobility services has continued to surpass all expectations …Jio management is focused on giving unmatched digital experience at most affordable price to every citizen of the country, and accordingly expanding the network capacity and coverage to keep pace with demand,” Mukesh Ambani, Chairman and Managing Director, of Reliance Industries Limited said in a statement.

Beta trials of JioGigaFiber services have been “very successful” and the entire bouquet of smart home solutions would “soon” be rolled out to targeted 50 million households and beyond, Ambani pointed out.

During the June quarter, the Average Revenue per user (ARPU) for Reliance Jio – the company that unleashed one of the most brutal price wars in India’s telecom market – was at Rs 122 per subscriber per month. This is, however, lower than ARPU of Rs 126.2 per subscriber per month seen in the March quarter.

Anshuman Thakur, head of the strategy for Jio, said that ARPU is lower as the company is concentrating on longer-term plans, and many users are taking Jio Phones which also eats into the average realisations. The company claimed that it was not into ARPU game and would rather focus on adding subscribers.

There is also an increasing trend of customers going in for digital recharges which is impacting the ARPU as the users are typically given incentives on such recharges.

Earlier Friday, Reliance Jio, outpaced Bharti Airtel to become the second largest mobile operator with 32.29 crore subscribers and 27.80 per cent market share in May 2019, as per regulator Trai’s data.

The move was significance as Reliance Jio stormed into the highly-competitive telecom sector in September 2016 with its disruptive voice and data offerings, while Bharti Airtel had launched its services way back in 1995.

As per Telecom Regulatory Authority of India (Trai), Vodafone Idea born last year from the merger of older operators Vodafone India and Idea Cellular continues to be the largest operator with 38.75 crore consumers and 33.36 percent market share in the wireless segment as on May 31, 2019.

Sunil Mittal-promoted Bharti Airtel has slipped to the third spot with 32.03 crore mobile subscribers and 27.58 percent market share during the month.

Established operators like Bharti Airtel, Vodafone Idea Ltd are in the midst of a bruising tariff war following the entry of Reliance Jio, backed by India’s richest man Mukesh Ambani.

Jio’s free voice and dirt-cheap data offering have dented the financial metrics of older operators, deepening the impact of regulatory decisions like cut in termination charges, even though the voice and data usage have been growing at a scorching pace.

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