Reliance Jio reports its strongest profit growth in five quarters as it offloads millions of low quality subscribers
- India’s largest telecom provider, Reliance Jio, on Friday announced its March 2022 quarter results, in addition to the full FY 2021-22 results.
- The past three months saw Jio’s average revenue per user surge 11% to ₹167.6, continuing the momentum the telco gained in the December quarter.
- One of the contributors to Jio’s improved bottomline is the fact that it offloaded millions of dormant, low-quality subscribers, improving its per subscriber metrics drastically.
AdvertisementReliance Jio, India’s largest telecom company, announced its financial results for the January to March 2022 period, showing strong momentum in how much it makes on an average from each subscriber, also known as ARPU (average revenue per user).
Reliance Jio posted 14% growth in its net profit between January and March 2022 – this is Jio’s strongest profit growth in five quarters, but it is still below analyst expectations of ₹5,000 crore quarterly profit.
Source: Company reports
|Particulars||Jan-Mar 2022||Growth (YoY)||Oct-Dec 2021||Growth (QoQ)|
|Revenue||₹26,139 crore||21%||₹24,176 crore||8%|
|Net profit||₹4,313 crore||23%||₹3,795 crore||14%|
Reliance Jio also posted an increase of 11% in its ARPU – a critical metric for measuring a telecom company’s performance. There were multiple factors contributing to this – a 21% tariff hike and offloading millions of low-quality and dormant subscribers which had been subduing the company’s ARPU numbers for several quarters now.
After resisting analyst warnings for several months, Jio finally raised tariffs after its rivals Airtel and Vodafone Idea announced hikes to the tune of 20-25%. Jio’s tariffs are still the cheapest amongst the three, and analysts at JP Morgan expect the benefits from this hike to flow only in the June 2022 quarter.
This is also the third consecutive quarter of subscriber loss for Reliance Jio – it has lost over 30 million subscribers over the last three quarters. Overall, for the financial year 2021-22, Jio’s subscriber numbers are down by 16 million. This is despite the launch of the affordable JioPhone Next, which was a key weapon in Mukesh Ambani’s arsenal to reach the 500 million subscriber mark.
Jio reported that its total customer base stood at 410 million subscribers, after falling below the 421 million figure in the previous quarter.
Reliance Jio’s last quarter in numbers
Coming to the financials, Jio reported a healthy two-digit increase in net profit between January and March 2022, increasing to ₹4,313 crore from ₹3,795 crore in the previous quarter – this is an increase of 14%. On a year-on-year basis, its profit surged by 23%.
Jio also witnessed a healthy surge of 8% in its revenue during the quarter, increasing to ₹26,139 crore as compared to ₹24,176 crore in the quarter before. On a year-on-year basis, this is an increase of nearly 21%.
Both data and voice usage saw a substantial increase this quarter
Data traffic saw an increase of 7% compared to the previous quarter. The average data usage per user during the quarter stood at 19.7GB, as compared to 18.4GB in the previous quarter.
Voice usage increased to 968 minutes from 901 minutes in the quarter before.
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