Reliance Jio financial result and main facts to know

Reliance Jio has announced the first profit during the third quarter of financial year 2018 ended December 31, 2017.

The first net profit of Rs 504 crore in its short corporate history against a net loss of Rs 271 crore in the previous quarter was significant for the Mukesh Ambani-promoted 4G operator in the country. Reliance Jio bought the first spectrum in 2011 and started business in Sept 2016.

The 11.9 percent increase in operating revenue to Rs 6,879 crore, 82.1 percent growth in EBITDA to Rs 2,628 crore with EBITDA margin of 38.2 percent and 453 percent rise in EBIT to Rs 1,436 crore in Q3 fiscal 2018 as compared with Q2 fiscal 2018 was remarkable for Reliance Jio, a new telecom operator in India.

For comparison, Bharti Airtel has reported a net profit of Rs 306 crore on a revenue of Rs 20,319 crore in the December quarter from its telecom operations in India and Africa. In addition to mobile business, Airtel generates revenue from enterprise and DTH.

Reliance Jio is continuing to disrupt the mobile data space with its cost effective data plans. As a result, the 4G operator has achieved 160 million subscribers after it added 21.5 million users. Reliance Jio said it lost 6.3 million subscribers since the gross subscriber addition was 27.8 million. Jio did not cite reasons for the departure of its subscribers.

Jio in the previous quarter made a gross addition of 19.5 million subscribers and net addition of 15.3 million. That means the churn on Jio 4G network has increased to 6.3 million from 4.2 million showing that the network is not meeting demands of its mobile data customers in India.

Jio said wireless customer churn at 1.4 percent per month is the lowest in the Indian telecom industry.

Reliance Jio reported ARPU of Rs 154 per subscriber per month. Jio’s wireless data traffic was 431 crore GB or 9.6 GB per subscriber per month. Jio reported voice traffic of 31,113 crore minutes. Video consumption has crossed 200 crore hours per month on the network. This means that Jio subscribers are consuming 13.4 hours of video per month.

Jio claims that it is largest video network in the world. The video consumption indicates about the future potential of the business of Reliance Jio. At present, the Rs 154 ARPU is showing the competition in the country and the slowing economy. The latest TRAI norms have also impacted Indian telecom operators.

“Our commitment is to keep pushing newer innovative products which would radically transform customer lives and generate huge societal value,” said Mukesh D Ambani, chairman and managing director of Reliance Industries (RIL).

The company is on track to achieve 99 percent population coverage during the year. Jio has deployed pan-India 4G across the 800MHz, 1800MHz and 2300MHz bands. The company did not reveal the number of base stations / cellular towers or related investment towards Capex programs.

Reliance Jio has reported operating expenses (Opex) of Rs 6108 crore including Network Operating Expenses of Rs 1736 crore, Access Charges of Rs 1081 crore, License Fees/Spectrum Charges of Rs 622 crore, Employee Expense of Rs 334 crore, Finance Costs of Rs 663 crore, Selling and Distribution expenses of Rs 269 crore and Other expenses of Rs 207 crore.

Baburajan K