India’s largest service provider, Reliance Jio Infocomm, recorded an exceptional performance in the first quarter of the current financial year, largely driven by a strong voice and data consumption and rising average revenue per user (ARPU).
Jio claims this to be the best ever quarterly revenue for Jio Platforms, up 23.6% year on year. Jio’s ARPU during the quarter stood at INR175.7 ($2.2) per subscriber per month with a YoY growth of 27 percent, and 4.8% higher when compared with the ARPU in the preceding March quarter. The company added 9.7 million net new subscribers during this quarter.
With this increase in ARPU, it has closed the gap with Bharti Airtel, which recorded ARPU of $2.23 in the March 2022 quarter, up from $2.04 in the December 2021 quarter. This increase in ARPU is the result of the rate increase announced by all telcos in November 2021. The Mukesh Ambani-led telco raised rates by 20% in November of last year, which has helped it eventually gain ARPU.
Analysts have forecast that Indian service providers may raise rates once more this year to grow their ARPU as the expense on the spectrum and network modernization continues to grow. "The company continues to invest in augmentation of the wireless and wireline network capacity," says Jio’s audit report.
Jio’s business is heavily relying on increased customer engagement with its Digital Services Platform. Its total data traffic was 25.9 billion GB during the quarter, higher by 27.2% with a total customer base of 419.9 million as of June 30, 2022, up from 410.2 million in March 31, 2022. Voice traffic recorded a growth of 17.2 per cent YoY. In comparison to the prior quarter, the impact of SIM consolidation because of the increase in rates came down considerably.
“Customer engagement on our digital services platform remains high. Jio is working towards expanding data availability for all Indians and I am pleased to see the positive trends in mobility and FTTH (fiber to the home) subscriber additions,” said Mukesh Ambani, chairman of Reliance Industries, in a statement. During the quarter Mukesh Ambani’s son, Akash Ambani, non-executive director of Reliance Jio Infocomm, was appointed as chairman of Jio Platforms.
Money matters
Jio, India’s only pure-play 4G service provider, said gross revenue for the quarter reached INR218.7 billion ($2741.3 million), up by 4.65% when compared with the previous quarter. It recorded a significant increase in net profit in the quarter, which reached INR43,550 million ($545.78 million), higher by 23.2%. On a quarter-on-quarter (QoQ) basis, Jio Platforms’ profit grew 5% during the June quarter.
The company is trying to increase data accessibility to increase the number of FTTH subscribers. According to data released by the Telecom Regulatory Authority of India (TRAI), Jio has a market share of more than 80% of new user additions in the wireline segment. The telecom company added over 3.1 million wireless subscribers in May and led the wireless market with a market share of 35.69%, up from 35.5% in April.
Readying for 5G
Jio, like other service providers, is preparing to participate in the upcoming 5G spectrum auction, all set to start Tuesday. Apart from Jio, Bharti Airtel, Vodafone Idea and Adani Group would slug it out for spectrum across several frequency bands.
Jio has also conducted several 5G trials with the spectrum acquired from the government for trials. To aggressively compete in the 5G era, Jio is also placing significant bets on digital media and entertainment.