Reliance Jio is making less money off its subscribers than it did 12 months ago
- Analysts have warned that if the average revenue per user does not improve,
Jiomay go for a tariff hike. Reliance Jiohas reported a profit decline of nearly 4% with net profit of ₹3,508 crore.
- During the March quarter, Jio added over 15 million new subscribers, after a disappointing December quarter.
- Jio also witnessed a major slump in average revenue per user (ARPU), which fell to ₹138.2, a decline of over 8%.
Jio’s ARPU is the lowest in the last four quarters
Two other factors weighing down on the profit are affordable postpaid plans and JioPhone, which attracts low average revenue per user (ARPUs). Both the new phone and the cheaper postpaid plans were rolled out in Oct-Dec 2020, and they are now weighing down the financials.
Reliance Jio has added three times more subscribers between Jan-March 2021 compared to the preceding three months. But most of them are low-paying users, who use Jio as a second phone for cheaper plans, and therefore the subscriber addition is not adding to the revenue or the profit in a big way.
“We believe Reliance Jio should be comfortable taking tariff hike if the current market structure is maintained, wherein it provides more value for money to subscribers compared to peers. This structure would ensure Jio grows its subscribers faster,” stated an ICICI securities report dated April 8, 2021.
Reliance Jio’s last quarter in numbers
Reliance Jio, India’s largest telecom provider has reported a 0.5% increase in profit between January and March 2021, increasing marginally to ₹3,508 crore from ₹3,489 crore in the previous quarter.
Jio also witnessed a slump in its revenue during the quarter, falling to ₹18,278 crore as compared to ₹19,475 crore in the quarter before. This is a fall of 5.3%.
Data traffic saw an increase of 5.2% compared to the previous quarter. The average data usage per user during the quarter stood at 13.3GB, as compared to 12.9GB in the previous quarter.
Voice usage also witnessed moderate increase of over 3%, jumping to 823 minutes from 796 minutes in the quarter before.
AdvertisementIt remains to be seen if Jio increases its tariffs to recover the slump in its ARPU.
Look for this number in Reliance Jio’s earnings — it will tell you if the tariff will rise
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