Jio Struggling with ARPU Growth for Multiple Quarters Now

Reliance Jio is struggling to grow its average revenue per user (ARPU) per month the way Airtel is growing it. Jio’s ARPU for Q3 FY23 was Rs 178.2, and in the previous quarter (Q2 FY23), it was Rs 177.2. In Q1 FY23, Jio’s ARPU was Rs 175.7. This is a very slow growth of ARPU despite the tariff hikes in 2021. It looks like the effect of the tariff hikes has faded from the business of Jio, and now, without any further hikes, the telco’s ARPU is going to grow at these small margins only.

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Slow ARPU Growth Affecting Profit Growth as Well

The slow growth of ARPU is also affecting the overall profitability of Reliance Jio. While the telco boasts the largest profit made by any operator in the country, it also is very much behind Airtel in maximising revenues from customers. Airtel’s ARPU for Q2 FY23 was Rs 190. It is expected to grow to Rs 194 in Q3 FY23.

Read More – Reliance Jio Posts Rs 4881 Crore Net Profit for Q3 FY23, ARPU at Rs 178.2

The lower the ARPU, the lower the overall revenues, and the lower the profits. Of course, the private telcos are going to benefit from the no SUC (spectrum usage charge) on the spectrum bought in 2022 auctions. So the expenses should be lower on that side; however, it would be offset by the rise in network capex to roll out 5G. Thus, the expenses, even though they are going up, the ARPU is standing almost where it used to be.