Q1 Results: Reliance Jio Posts Surprise Profit Growth Even As ARPU Declines

Reliance Jio Infocomm Ltd. reported a surprise profit growth in the April-June quarter even after starting to pay fees for its towers and fibre and a fall in average revenue per user.

Profit in the three-month period grew 6 percent sequentially to Rs 891 crore, according to its stock exchange filing. Analyst estimates compiled by BloombergQuint had pegged profit at Rs 840 crore, a decline of 4.3 percent.

• Revenue rose 5.16 percent to Rs 11,679 crore.
• Operating profit rose 7.9 percent to Rs 4,670 crore.
• Margin expanded 100 basis points to 39.9 percent.
• Average revenue per user fell to Rs 122 per month from Rs 126 in the previous quarter.

The Mukesh Ambani-owned telecom operator was expected to earn lower profit on every rupee of revenue after it transferred its tower and fiber assets to a separate unit controlled by an investment infrastructure trust. That meant it paid fee for using these assets from April. Still, strong subscriber additions aided revenue growth, offsetting the impact.

Jio added 24.5 million subscribers during the quarter, taking its base to 331.3 million users.

“Growth in Jio mobility services has continued to surpass all expectations,” Chairman and Managing Director Ambani said in a media release. “In less than two years of commercial operations, Jio network carried almost 11 exabytes of data traffic during the recently concluded fiscal quarter.”

Brookfield To Invest Rs 25,000 Crore In Reliance’s Tower Assets

Brookfield Asset Management Inc. has agreed to invest Rs 25,215 crore in the tower business of Reliance Industries Ltd.

Proceeds from the investment by Brookfield, made via its subsidiary BIF IV Jarvis India Pte Ltd., will be used to repay certain existing financial liabilities of tower business, according to an exchange filing. The rest will be used to acquire Reliance Industries’ 49 percent stake in Reliance Jio lnfratel Pvt Ltd., the holding company of Reliance Jio’s tower assets.