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Reliance Jio shows potential with strong performance in August


Devdiscourse News Desk mumbai Last Updated at 13-11-2018 19:43:30 IST India
Reliance Jio shows potential with strong performance in August
  • (Image Credit: Twitter)

Reliance Jio has been the only gainer in the telecom sector in August from a revenue-per-user as well as profitability perspectives, helping it increase the market share sweepstake to 20.8 per cent, says a report.

The Mukesh Ambani-led teleco's market share rose to 20.8 per cent in August from 19.6 per cent in July, against Vodafone Idea's subscriber market to 37.9 per cent, making it the market leader.

Jio, already the third biggest by a number of subscribers, added the maximum number subscribers at 12.2 million, driven majorly by its 4G feature phone launch, it said, adding the competition reported flat numbers or even a decline from the year-ago levels.

On the average revenue per user (Arpu) front, the incumbent telcos have taken a hit due to Jio's aggressive marketing strategy over the past two years, it said.

At an Arpu of Rs 135, Jio is an "outlier" as this was the highest in the industry in Q1 as against 100-105 for competition. But the same fell steeply to Rs 131.7 per user in the second quarter but still managed to report higher net income of Rs 681 crore.

Against this, Bharti Airtel, which was the largest player before the Vodafone-Idea merger reported a steep 65.7 per cent plunge in net income for the September quarter to Rs 118.80 crore as its Arpu declined 29 per cent to Rs 101 from Rs 142 in the same period last year. The merged entity of Vodafone Idea will announce its second-quarter numbers Wednesday.

Key players are now focussing low tariff plans coupled with large data allowance at a low price, which is further putting downward pressure on Arpu levels, it said. From a profitability perspective, it said Jio's pretax margins were stable at 32 per cent for the last two quarters, but the same period saw second largest telco Bharti Airtel's margins sliding by 4.40 per cent.

"Bharti has lost 12 per cent of its annual revenue in India during the last six months, mostly to Jio. Also, Bharti's margin declined to 31 per cent in the first half from 38 per cent a year ago, attributable to increased competition and low Arpu realisation," it explained.

(With inputs from agencies.)


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