Jio’s High Net Profits Enable it to Sustain at Lower ARPU

Reliance Jio's net profits have been much higher than that of its competition. So even if there's a player that has a higher ARPU than Jio, it doesn't make a lot of difference to the Reliance Group company as it makes more money at the end of the day. 

Highlights

  • Reliance Jio, India's largest telecom operator, has not seen any growth in average revenue per user (ARPU) for two quarters.
  • The telco's ARPU was the same in Q2 and Q3 of FY24 - Rs 181.7.
  • Bharti Airtel has designed its offerings in a manner that would not only suit the customers but also boost its ARPU.

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jio high net profits enable it to

Reliance Jio, India's largest telecom operator, has not seen any growth in average revenue per user (ARPU) for two quarters. The telco's ARPU was the same in Q2 and Q3 of FY24 - Rs 181.7. In fact, the growth in the previous quarters was also too low compared to the level of growth Airtel saw. Bharti Airtel has designed its offerings in a manner that would not only suit the customers but also boost its ARPU. We have talked about this before and you can read about it through the link below.




Read More - Jio vs Airtel vs Vi: the Battle of ARPU and Who’s Winning

Why is Jio not trying to boost its ARPU? And why does Jio never talk about ARPU? Well, it is likely because the telco is making the highest revenues and the largest net profits in the industry.

Jio's Net Profits Have Been the Highest in the Industry

Reliance Jio's net profits have been much higher than that of its competition. So even if there's a player that has a higher ARPU than Jio, it doesn't make a lot of difference to the Reliance Group company as it makes more money at the end of the day.

To give you the context, Jio's net profits for Q3 FY24 was Rs 5,208 crore and Rs 5,297 crore in Q2 FY24. Compared to this, Airtel, even with a better ARPU posted a net profit of Rs 2,442 crore in Q3 FY24 and Rs 1,341 crore in Q2 FY24. So to sum it up, Jio's net profit for one quarter was higher than Airtel's net profit for two quarters.

But this doesn't mean Jio doesn't need to improve its ARPU. By improving ARPU, the telco will ultimately improve margins on its revenues, resulting in even higher net profits. But the telco isn't bothered too much by its ARPU, rather, Jio wants to play at scale and wants to earn money from more people.

At the end of the day, both Jio and Airtel look at the market with a different set of eyes and both have a different strategy to achieve their ultimate goal - make profits and deliver great services.

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