Q2 Results: Reliance Jio Profit Rises On Aggressive Subscriber Additions
Reliance Jio Infocomm Ltd.’s profit rose in the quarter ended September on the back of strong subscriber additions due to the introduction of a newer version of its low-cost JioPhone.
Net profit for the telecom carrier rose 11.3 percent sequentially to Rs 681 crore, according to its parent Reliance Industries Ltd.’s stock exchange filing. That’s lower than the Rs 743-crore consensus estimate of analysts polled by BloombergQuint.
- Revenue went up 13.9 percent to Rs 9,240 crore.
- Operating profit rose 13.5 percent to Rs 3,563 crore.
- Operating margin contracted 10 basis points to 38.7 percent.
The average revenue per user narrowed for the fourth straight quarter to Rs 131.7, the lowest since the company’s inception. The decline is largely because Reliance Jio has been adding subscribers aggressively through JioPhones, which also offer cheaper data packs. That coincides with a monsoon offer launched in July that let customers exchange old feature phones for a new JioPhone at an effective entry cost of Rs 501.
The Mukesh Ambani-led telecom upstart, however, saw revenue and profitability improve due the pace of subscriber additions. It added more than 3 crore subscribers during the quarter and had 25.2 crore users as of September end.
Ambani will now look to extend his disruptive price war across related services as he plans to expand Jio into internet and cable television businesses. His firm has also rolled out JioPhone 2, an upgraded version of its best-selling feature phone. The 4G-enabled handset will support YouTube, WhatsApp and Facebook.
(Corrects an earlier version that misstated the profit estimate)