Reliance Jio Q1 Net Profit Rises 20% to Rs 6 Billion

Reliance Industry’s telecom arm Jio Infocomm reported a net profit of Rs 6.1 billion for April-June quarter, a rise of 20 per cent from Rs 5.1 billion during the year-ago period. The average revenue per user (ARPU), however, fell marginally to Rs 134.5 (from Rs 137 last quarter), but continued to be higher than the industry average.

Operating revenue jumped 13.8 per cent sequentially to Rs 81 billion in line with Street estimates from Rs 71.28 billion last quarter. The company reported earnings before interest, tax, depreciation and amortisation (EBIDTA) of Rs 31.5 billion growing 16.8 per cent quarter on quarter, while margins improved by 101 basis points (bps). Jio reported a capex of Rs 170 billion.

“We’ve witnessed good traction from our postpaid services, while ARPU was largely driven by higher data consumption. The ARPU decline was due to the reduction in prime user fees as well as the discounts provided on digital recharge,” said Anshuman Thakur, head of strategy, Reliance Jio. Per month per user data consumption for Jio has increased to 10.6 GB, up from 9.6 GB during the last quarter. Jio has seen higher user engagement due to the sports events viewership over the past few months and expect the engagement levels to continue rising.

Jio’s growth came as its rival Airtel reported a net loss of Rs 9.4 billion in its India operations during the quarter ended June. Due to an exceptional gain Rs 5.15 billion, the telco reported a consolidated net profit of Rs 970 million for the June quarter.

Jio said that less than 10 per cent of total Jio user base continues to be on the cheapest Rs 49 plans with most choosing to upgrade to higher plans as data consumption increases across the ecosystem.

“We doubled our customer base and most user metrics in the last 12 months. 215 million customers within 22 months of start is a record that no technology company has been able to achieve anywhere in the world,” Mukesh D Ambani, chairman and managing director, Reliance Industries Limited said in a statement. – Business Standard