Jio to Gain Most from Potential 5G Monetisation After FTTH, Free 5G Data Usage Surge: ICICI Securities

“Churn rate has reduced a tad to 1.8 percent (vs. 2 percent in Q3FY25) and gross adds were stable at 32.3 million (vs. 32.1 million in Q3FY25). Minutes grew 3.5 percent YoY to 1,490 billion, and data usage was up 19.6 percent YoY to 48,900 billion MB, of which 45 percent of data is generated on the 5G network. Data usage growth was aided by FTTH subs that use higher data quantity, with their number growing swiftly for RJio; and unlimited free data on 5G,” the report noted.

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Cost Pressures Mount Despite Higher Revenue

The report also pointed out that network costs rose 6.9 percent YoY to Rs 84 billion and the cost may continue to rise, driven by the commerical launch of 5G services, including JioAirFiber, which has seen the completion of phase-1 launch and increased rollout JioFiber that would help charge more fiber rental cost to the profit and loss account.

“SG&A expenses grew 41.7 percent YoY to Rs 19.8 billion. Employee costs rose 4.3 percent YoY to Rs 5 billion. Access charges have increased 132 percent YoY to Rs 5 billion. RJio has seen higher inflation across cost items, which has restricted EBITDA margin expansion,” the research note said.

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World’s Largest Data Operator

As reported previously, Jio claims to be the world’s largest data operator, and sees 5G monetisation as its next driver. The company says it has built over 80 percent of the industry’s 5G capacity, deploying more than 1 million cells across India. “Given the significant capacity headroom, Jio will continue to capture market share in new 5G subscribers and their higher usage,” the company said.

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Free Data Consumption, Opportunity for Monetisation

Jio views the free data consumption trends as proof of success, and the high engagement provides an opportunity for monetisation. “This 5G traffic is not monetised separately, as unlimited 5G data download is allowed beyond certain tariff plans,” the telco said, adding that this creates a substantial opportunity for monetisation of the 5G user base and traffic.

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Furthermore, Jio says monetisation will also be driven by network slicing for low-latency networks, secure connectivity, and Private 5G for premium users.

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