Reliance Jio Q2 net profit at ₹990 crore; ARPU falls to ₹1201 min read . Updated: 18 Oct 2019, 06:58 PM IST
- The company’s operating revenue rose 33.7% year on year to ₹12,354 crore
- ARPU stood at ₹120 with 355.2 million subscribers of September end
NEW DELHI : Reliance Jio Infocomm Ltd, India’s newest and only profitable telecom operator, posted a net profit of ₹990 crore in the September quarter, up 45.4% year-on-year, as data consumption surged on the back of more subscribers onboarding the network.
The company’s operating revenue rose 33.7% year on year to ₹12,354 crore.
Despite the growth in operating revenue, its average revenue per user fell for the seventh consecutive quarter as most of the subscribers added were low-paying users.
ARPU stood at ₹120 with 355.2 million subscribers of September end.
ARPU is the total revenue of the operator divided by the number of users or connections on its network.
From ₹154 in the December 2017 quarter, Jio’s ARPU fell 15.6% to ₹130 in the same quarter in 2018 and to ₹126.2 in the March 2019 quarter. It was ₹122 in the June quarter.
“Incrementally we expect the growth to come more from the mid-to-low end subscribers and in process diluting the overall ARPU," Bank of America Merrill Lynch said in a report dated 16 October.
At a time when its rivals are weaning away bottom-of-the-pyramid subscribers by launching minimum recharge plans and improving their ARPU, Jio continues to widen its subscriber base by adding low-paying users on its network.
Comparatively, Airtel’s ARPU rose to ₹129 in the June quarter from ₹123 in the preceding three months. Vodafone Idea posted an ARPU of ₹108 in the June quarter. Airtel and Vodafone Idea are yet to announce financial results for September quarter.
In the June quarter itself, Jio beat rivals Airtel and Vodafone Idea to become the largest operator in terms of revenue. It achieved the rare feat of market leadership in the telecom industry in less than three years of starting its operations in September 2016.
In the June quarter, Bharti Airtel also posted its first quarterly loss in 14 years. It swung to a ₹2,866 crore loss in the quarter ended 30 June from a net profit of ₹97 crore in the year earlier as finance costs rose and it incurred a one-time loss of ₹1,445 crore. Vodafone Idea posted net loss of ₹4,873.9 crore in the June quarter.