Late last week, Reliance Industries announced results for the second quarter ended September for the fiscal year 2017-18.
For the first time Mukesh Ambani-owned company disclosed the earnings for its telecom business Reliance Jio.
The newest telecom operator Reliance Jio Infocomm Ltd reported a Rs 260 crore ($40 million) profit before interest and taxes and a net loss of Rs 271 crore (approximately).
The company launched its services commercially in September 2016. Till April 15 this year, Jio’s services were free.
Here’s decoding Reliance Jio’s financial performance during the second quarter …
Reliance Jio posted a net loss of Rs 270.6 crore in July-September quarter against a net loss of Rs 21.3 crore in June quarter.
Jio’s revenue for the quarter stood at Rs 6,147.06 crore. The company’s EBITDA stood at Rs 1,442 crore with margin at 23.45 percent.
Reliance Jio’s subscriber base has jumped to 138.6 million users, consolidating its position as the fourth largest telco. The company added 1.5 million users during the quarter.
According to Reliance Jio, most users have subscribed to Jio’s Rs 399 plan and there are few takers for the company’s Rs 149 plan.
Reliance Jio Infocomm is expected to post a net profit next fiscal (2018-19).
According to Motilal Oswal analysts, the profit may come on the back of strong user additions and higher average revenue per user (ARPU).
The Mukesh Ambani-led telecom operator should sustain its operating profit, or positive Ebitda, in this financial year, added analysts.
The company reported a robust ARPU of Rs 156.4 during the second quarter. Jio’s ARPU is higher than the Rs 154 recorded by market leader Bharti Airtel in the April-June period.
According to Motilal Oswal analysts, Jio’s reported ARPU in the second quarter has three revenue components. These include the June quarter ARPU of customers who paid for the 4G entrant’s ‘Summer Surprise’ and ‘Dhan Dhana Dhan’ promotional offers that got accounted for only in the September quarter earnings. As the first three months, starting April, were free.
The pace of subscriber additions has slowed as Reliance Jio started charging users for data from April and due to the limited number of 4G smartphones in the market. Jio initially had a rapid start with the company hitting a record 100 million users in the first 170 days of the services going commercial.