Reliance Jio's average revenue per user (ARPU) figure rose from Rs 181.7 to Rs 195.1 QoQ in Q2 FY25. This happened because of the tariff hikes implemented early in the quarter. Jio hiked tariffs of its prepaid plans on July 3, 2024. The telco's ARPU was at a standstill for several quarters, while Bharti Airtel had seen impressive growth and was much ahead. Jio trailing behind Airtel had needed the hikes to boost the ARPU and thus was the first operator to increase the prices.
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Reliance Jio is now much closer to the ARPU milestone of Rs 200. The telco said that the full impact of the tariff hike will flow through in the next 2-3 quarters. ARPU is an important metric for telcos as it tells how much the company is earning from each of its customers.
The telco is yet to monetise 5G. However, at some level, the monetisation has already started. The decision to only offer 5G with plans that bundle 2GB daily data or more is in fact some monetisation already taking place. People who want to use or experience 5G are now left with no other option but to pay for the 2GB daily data plans, which are not cheap.
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Jio was in desperate need of this ARPU (average revenue per user) boost as the telco's ARPU was Rs 181.7 flat for consecutive quarters. Jio has to improve margins to justify the investments in networks to shareholders. Thus, the telco's approach is now back to focusing on 4G and increase its prices and get users to spend more. At the same time, it is still marginally more affordable than its most fierce competitor, Bharti Airtel. Airtel's ARPU stands at Rs 211 and is expected to jump considerably after the tariff hikes in July 2024.
