Reliance Jio ARPU Boosted by Tariff Hike But Growth Momentum Has Slowed

Motilal Oswal, an Indian diversified firm engaged in financial services in a report on Sunday said that growth momentum of Reliance Jio has slowed in its second quarter of the current financial year. Reliance Industries on Friday announced its second quarter results with the company highlighting that its subsidiary Jio Platforms registered a 7.2% quarter-on-quarter (QoQ) improvement in its consolidated revenues. Jio Platforms is said to have registered a consolidated revenues of Rs 18,496 crores and Rs 3020 crores in consolidated net profit for the quarter ended September 30, 2020.

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Tariff Hikes Boost Reliance Jio ARPU

Motilal Oswal said that the Reliance Jio subscriber growth had slowed to 7.3 million in its second quarter, down from 10.8 million in the previous quarter. However, the firm highlighted that the operator’s average revenue per user (ARPU) improved 3% “benefiting from a tariff increase.”

“Cumulative ARPU growth in the last four quarters has been moderate at 14%, against Bharti’s 27%, and average tariff hike at about 25%,” Motilal Oswal said in its report. “Nevertheless, its venture into multiple digital services, along with scope for ARPU improvement, offers ample growth opportunity.”

The firm highlighted that the Jio Platforms is “keen to replicate its success in wireless” segment in “other business streams.”

“With aggressive plans and product launches in place, Jio Platforms is creating multiple monetization opportunities in the Digital space,” Motilal Oswal said in its report.

KRChoksey Institutional Research, a Mumbai based wealth management firm in a report on Monday said that the improvements in ARPU and subscriber addition aided Reliance Jio to register an enhanced consolidated revenues.