Jio revenue for Q2 brings exciting facts to telecom industry

Jio for VoLTE serviceThe financial performance of Reliance Jio Infocomm for the quarter ended September 30, 2017 is showing exciting facts to the Indian telecom industry.

Reliance Jio, a 4G operator promoted by billionaire Mukesh Ambani, posted consolidated revenue of Rs 7,213 crore and consolidated EBIT of Rs 261 crore.

Reliance Jio’s standalone revenue from operations was Rs 6,147 crore with a standalone EBITDA of Rs 1,443 crore with an EBITDA margin of 23.5 percent.

Reliance Jio’s standalone EBIT was Rs 260 crore with EBIT margin of 4.2 percent.

# Revenue of Rs 6,147 crore
# EBITDA of Rs 1,443 crore
# EBITDA margin of 23.5%
# Jio ARPU of Rs 156.4
# Highest per capita data consumption at 9.62 GB/ user/ month
# Voice consumption of 626 minutes per month
# 178 crore hours of high speed video consumption per month
# Customer churn at 1% per month
# Jio has 80% of the overall industry data capacity and commensurate voice capacity
# To reach 95% population coverage by next year
# Jio 4G coverage greater than 2G coverage of any other operator
# Distribution channel with over 1 million retailers
# Positive EBIT in the first quarter of commercial operations

Some facts for analysis

Jio’s revenue of Rs 7,213 crore (above the $1 billion mark) with consolidated EBIT of Rs 261 crore in the second quarter from 130 million customers was exciting. The main fact to consider is the free voice service to all its customers. The revenue is from data business alone.

Reliance Jio’s revenue performance was comparable with Airtel India’s mobile service revenue of Rs 12,914 crore (–14 percent) from 280 million 2G, 3G and 4G customers in the first quarter of fiscal 2017-18. In the June quarter of 2016, Airtel had posted Rs 15,042 crore revenue from mobile service business alone.

The total revenue of Bharti Airtel was Rs 17,244 crore in the first quarter of fiscal 2017-18. This revenue was from mobile service, enterprise and DTH businesses.

Reliance Jio posted standalone revenue of Rs 6,147 crore with a standalone EBITDA of Rs 1,443 crore with an EBITDA margin of 23.5 percent.

EBITDA of Airtel was Rs 4,428 crore in the June quarter of 2017 and Rs 6,409 crore in the in the June quarter of 2016.

Airtel posted 34.3 percent EBITDA margin in the June quarter of 2017 and 42.6 percent in the June quarter of 2016.

Reliance Jio observed customer churn of 1 percent per month. For comparison, Airtel had 3.8 percent churn in June quarter.

Reliance Jio said voice consumption was 626 minutes per month. Airtel consumers used 421,912 million minutes on the telecom network in the June quarter.

Reliance Jio said the company achieved the highest per capita data consumption of 9.62 GB/ user/ month. Mobile data traffic at Airtel India’s 2G, 3G and 4G network increased 3-fold to 472 billion MBs in the first quarter as compared to 158 billion MBs.

Reliance Jio did not reveal its investment in telecom networks. Airtel had said the company’s Capex (capital expenditure) was Rs 6,241.8 crore (+51 percent) in June quarter.

The data ARPU of Rs 156 on Jio network is not exciting considering the fact that Reliance Jio is running a 4G network across the country. Airtel ARPU is nearly Rs 153 from its 280 million mobile service users.

Jio lost 4 million users

Reliance Jio posted 4G subscriber base of 138.6 million with a net subscriber addition of 15.3 million.

Reliance Jio lost nearly 4 million wireless subscribers during the second quarter despite offering cost effective data plans and free voice services.

ARPU of Reliance Jio was Rs 156.4 per subscriber per month.

Reliance Jio achieved wireless data traffic of 378 crore GB with a average voice traffic of 267 crore minutes per day.

“The strong financial result of Jio demonstrates the robust business model of Jio and the significant efficiencies that the Company has built through its investment in the latest 4G technology and right business strategy,” said Mukesh D Ambani, chairman and managing director of Reliance Industries (RIL).

Jio said the number of customers who have adopted Jio services in this quarter is 19.5 million and the net addition was 15.3 million.

Baburajan K