Jio Platforms Q1 results: Net profit rises 45% YoY to Rs 3,651 cr; Arpu flat at Rs 138.4

For the fiscal first quarter, JPL’s consolidated net profit stood at Rs 3,651 crore compared with Rs 3510 crore at March-end, and Rs 2,519 crore a year ago, the company said in a release on Friday.

Quarterly revenue rose to Rs 18,952 crore from Rs18,278 crore in the Jan-March period, and Rs17,254 crore a year ago.

The average revenue per user (ARPU), a key performance parameter, for the telecom business, grew sequentially to Rs 138.4 from Rs 138.2 in the previous quarter.

Net subscriber additions for JPL continued to be strong with 14.4 million in the just-ended quarter. Jio ended April-June with 440.6 million users, the company said.

“Jio has posted yet another record quarterly performance with industry-leading operating metrics. I am thankful to Jio’s family of loyal subscribers whose number has grown further during the quarter, consolidating its position as India’s No. 1 provider of digital connectivity and services,” Mukesh D. Ambani, Chairman, Reliance Industries, said in the statement.

JPL, established in October 2019 as a wholly-owned unit of Reliance, houses the Mukesh Ambani-owned group’s telecom business Reliance Jio Infocomm, the largest in the country, and other digital properties and investments. Reliance Jio though makes up the bulk of JPL’s numbers.

Reliance Jio saw its fiscal first-quarter net profit rise 39 per cent year-on-year and 3.9 per cent sequentially, to Rs 3,502 crore. Revenue for the telecom market leader rose to Rs 17,994 crore from Rs17,358 crore in the previous quarter and from Rs16,557 crore a year ago.

The telco “saw good traction in subscriber addition and data usage, unaffected by the covid second wave,” the company said.

“Jio’s healthy customer adds is largely driven by the strong take-up of its recent aggressive offers around its 4G feature phone, but ARPU growth is sluggish due to the higher contribution of these low-end JioPhone users,” said Mayuresh Joshi, head of equity research at the Indian unit of US equity research firm William O’ Neil & Co.

Joshi added that Jio’s customer adds for the second successive quarter running “shows the telecom market leader is grabbing a sizable chunk of Vodafone Idea’s 2G customers and competing strongly with Airtel, also reflecting its strong channel management.”

Average wireless data consumption per user per month rose to 15.6 GB from 13.3 GB in the fiscal fourth quarter. Average voice consumption, though, fell to 818 minutes per user per month from 823 minutes in the previous quarter.

JPL’s first-quarter Ebitda margin was flat sequentially at 46.9 per cent, while Reliance Jio’s was at 48 per cent. Reliance Jio’s quarterly expenses increased over 3 per cent on quarter, due mainly to higher expenses related to network operations, license fees, spectrum charges and finance costs, the company said.

At a virtual press briefing, Jio strategy head Anshuman Thakur said that Ebitda margins were steady even though the telco was expanding.

“We had a lot of challenges on the ground, there were things beyond the normal call of duty that we were doing, and expenses went up, also because we did give out benefits to customers,” Thakur said.

The company had recently launched a new JioPhone offer to push more of the country’s 2G users into its own 4G-only network in a bid to attain its targeted 500 million users. It also offered free minutes to users singed by the second wave of the pandemic.

“Yet we managed to hold on to the Ebidta margin…and net profit grew 44.9 per cent year on year,” Thakur said.

He added that the spectrum the company has acquired from the auctions and Bharti Airtel has created the capacity to onboard the next 200 million subscribers on Jio’s network. “Network capacity and device strategy is in place for the next 200 million Jio customers”.

Jio is set to launch JioPhone Next, which it claims will be the world’s most affordable 4G smartphone, in a bid to add more subscribers.

Thakur said the telco was very optimistic about the overall demand scenario, and its ability to service that demand.

“While there have been challenges and delay and incremental monetization of FTTH and digital platforms, we see a long runway ahead of us, both on the mobility side with what we have done with our network capacity and devices, 5G rollout, and even on the fibre-to-home and enterprise side where the demand has been extremely strong,” Thakur said.

Jio President Kiran Thomas said the company will use Google Cloud’s technologies to power 5G solutions.

“Jio and Google will collaborate to bring a portfolio of 5G edge computing solutions across gaming, healthcare, education and video entertainment,” he said.

Thomas added that despite on-the-ground challenges due mainly to the covid second wave, JioFiber has over 3 million connected homes. And the average home consumes almost 300 GB data a month.