In the October-December quarter, Jio Platforms’ — which houses Reliance Jio — revenue from operations rose 2.5% QoQ to `24,892 crore, compared to a 3.4% growth in the July-September quarter, 5.4% growth in the April-June quarter, and 8.1% growth in the January-March quarter last year. Bulk of the revenues of Jio Platforms comes from its telecom services arm, Reliance Jio.

The company’s net profit also witnessed a similar trend largely due to a weak growth in the revenues and increase in depreciation due to recently acquired spectrum and increase in network expenses owing to 5G rollout.

In the October-December quarter, Jio Platforms net profit rose 3.2% QoQ to `4,881 crore, compared to a 4.4% growth in July-September quarter, 5% growth in April-June quarter, and 13.6% growth in the January-March quarter of last year.

“The growth has to come from the tariff hikes. The January-March quarter last year saw growth because of the last tariff hikes in November 2021. It seems that Jio wants to focus on expanding its market share at present and is therefore not considering a tariff hike,” a Mumbai-based analyst said, adding that Airtel which already has a premium pricing compared to Jio fears subscriber loss in case it takes a lead in tariff hike and Jio does not follow.

In the absence of tariff hikes, Arpu increase depends only on subscriber addition.

For Jio, the average revenue per user (Arpu) grew 0.6% QoQ to `178.2 per month in the October-December quarter, compared to 0.9% growth in the July-September quarter, 4.8% growth in April-June quarter, and 10.5% growth in the January-March quarter. In comparison, peer Bharti Airtel’s Arpu grew 3.8% QoQ in the July-September quarter to ` 190, compared to 2.8% growth in April-June quarter.

A higher Arpu for Bharti Airtel can be attributed to increase in data monetisation and increase in upgrades by high-quality users on the company’s network. Bharti Airtel is yet to declare its earnings for the October-December quarter.

“There has been a change in strategy by Jio over the last year toward targeting premium-end subscribers. This exercise began early in FY22, where Jio lost 30 million subscribers as it started to churn out lower-Arpu subscribers, and this yielded results, with increased Arpu over this period. We believe it will target the high-end Arpu subscribers of Bharti and Vodafone Idea now with its aggressive 5G rollout, JP Morgan said.

With regards to growth in mobile subscribers, Jio’s net add stood at 5.3 million subscribers in October-December quarter, taking its total mobile subscribers to 432.9 million. The company added 7.7 million subscribers and 9.7 million, in the July-September quarter and April-June quarter, respectively.

“Jio’s change in strategy is also one of the reasons we believe tariff hikes won’t come in CY23, as telcos focus on defending — or, in the case of Jio, winning – market share through 5G rollouts. This should also drive deflation in high-Arpu subscribers, as Jio may launch unlimited data plans to attract 5G subscribers,” the brokerage added.

On the other hand, some analysts believe that tariff hikes are essential for Jio as it will soon plan to go public and for that financials will be important.

“In 2020, Jio Platforms raised funds from external investors. In the medium term, we see the possibility of a potential Jio Platforms IPO. In such a scenario, we think it is likely for Jio to focus on its financial metrics over market share gains. We have noted a reduced level of aggression from Jio since 2021 and expect this trend to continue. We do not expect any adverse pricing action at the industry level,” BNP Paribas said in a note.

Going forward, the company is eyeing a strong market penetration in the home broadband space through JioFiber and JioAirFiber, which will also boost the data consumption on its network which saw a marginal increase in October-December. The average data consumption on the company’s network rose 0.9% to 22.4 GB per month compared to 6.7% growth in the preceding quarter.

The company is currently eyeing to tap the market with its aggressive 5G coverage. Currently, its 5G network is available across 134 cities.

Jatin Grover/FE