Reliance Jio to Make the Most Out of Tariff Hike With Increased ARPU and Revenue

The Mukesh Ambani led telecom operator, Reliance Jio, is set to gain the most from the latest tariff hike, which has happened in the telecom industry. With this new report from ET Telecom, we have come to know that after a long time, Reliance Jio is finally moving away from deep discounting which has been one of its prime methods to lure new customers and something that has worked well for the telco in the past. The analysts have also shared their findings on the matter and said that the new tariff plans from Reliance Jio which are as much as 40% more pricy than the previous ones would push the EBITDA of the telecom operator by 33%. This upliftment in the EBITDA would translate to $1.5 billion for FY 2020-21 extra for the telecom operator in the FY20-21. Not only this, but the new tariff hike would also help the telecom operator in upping its Average Revenue Per User (ARPU), a very important industry parameter by 28% to 29%. This would bump up the ARPU to Rs 157 from its current levels.

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Reliance Jio ARPU to Witness a Rise

In a note to its clients, SBICap Securities remarked: “Jio has also introduced a new 56-day category — offering more voice calling benefits (IUC minutes) vs the 28-day category — that comes at a higher cost per GB pricing for the consumer, which suggests that Jio no longer intends to incentivise deep discounting.” Not only this, but the analysts have also said that till March 2020, the subscriber addition of Reliance Jio is expected to continue at the same pace with 9 million subscribers joining the telecom operator, and after that in FY20-21, the subscriber addition is expected to continue at the pace of 4 million a month. The analysts maintained their stance that the most to gain from the tariff hike would actually be Reliance Jio.