Reliance Jio Q1 profit jumps 3-fold to $336 mil., subscribers surge to nearly 400 mil.
NEW DELHI, NNA - The formidable telecom arm of India’s tech star Jio Platforms Ltd. has posted a nearly three-fold jump in net profit to 25.2 billion rupees ($337 million) during the first quarter of April-June.
Performing far better than the same period last year, Reliance Jio Infocomm Ltd. (RJIL) also saw revenues soaring over 33 percent to 165.57 billion rupees. Wireless data traffic went up more than 30 percent amid the coronavirus situation.
RJIL, the country’s largest telecom operator commanding almost one-third of the market, also gained 10.8 million new subscribers. This has further widened its huge base to 398.3 million, from 387.5 million in the preceding quarter.
Correspondingly, Jio Platforms has reported robust revenue growth of 33.7 percent driven by sustained subscriber momentum and improvement in ARPU (average revenue per user).
Jio saw EBITDA soar 55.4 percent year on year to 72.81 billion rupees. This has driven its net profit up by 183 percent to 25.2 billion rupees.
Jio Platforms witnessed a “strong” wireless gross addition of 15.1 million during the quarter despite pandemic lockdown restrictions enforced across the country.
“Customer engagement increased during the quarter with nationwide lockdown driving average wireless data consumption per user per month to 12.1 GB (gigabyte) and average voice consumption to 756 minutes per user per month,” group company Reliance Industries said in a statement on Thursday.
Commenting on Jio Platforms’ quarterly performance, Mukesh Ambani, chairman and managing director of Reliance Industries, said its partnerships with promising Indian startups and globally renowned tech firms will drive "the next leg of hyper growth for digital businesses" in its mission to serve 1.3 billion Indians with its integrated tech platform.
Jio Platforms recently raised 1,520.56 billion rupees (around $22 billion) from 13 global investors including Alphabet Inc.’s Google and Facebook Inc., to push its plan to deliver breakthrough technologies for a repertoire of services, from e-commerce to 5G connectivity. After the completion of these investments, Reliance Industries, would hold 66.48 percent equity stake in Jio Platforms.
In the April-June quarter, Jio rolled out India's first and only cloud-based video-conferencing app, JioMeet, which is seen as a rival to the Zoom app, which was used during social-distancing lockdowns in many countries.
JioMeet was downloaded by more than five million users within few days of its launch.
Said the Reliance statement, "JioMeet was used as a digital platform to host the 43rd AGM of Reliance Industries virtually. During this event, JioMeet had 320,000 concurrent users across 42 countries and 468 cities making it one of the largest shareholder meetings in the world."
With its meteoric rise after it was established in 2019, Jio Platforms is currently “best” placed to pose stiff competition to domestic and international rivals in India, according to GlobalData, a leading data and analytics company.
“With tech giants such as Google and Facebook investing in Jio Platforms, RIL not only is best placed to drive the increasing mobile phone penetration and boost Internet usage due to its cheap smartphones and 4G services but also has the advantage of capturing additional consumers through various digital services across the country,” it said in a statement.
Bindi Patel, an economic research analyst at GlobalData, said the work-from-home culture has gained momentum due to the coronavirus pandemic and demand for video-conferencing apps.
But she believes there are "high chances that consumers might prefer JioMeet over Zoom due to the various features it has to offer in addition to the data protection features."
Patel also noted that Jio has recently launched a slew of services and products such as grocery and e-commerce app JioMart, mixed reality headset Jio Glass, Jio Health Club, a platform that provides end-to-end healthcare services, and Jio TV+, a service that aggregates all streaming platforms like Netflix and YouTube.
Hence, it is only a matter of time before Reliance captures the huge growing consumer market in India, she said.
“By offering quality services at low cost, Reliance is setting up new standard for all domestic and international competitors to recalibrate their strategy in capturing one of the world’s largest consumer markets,” said Patel.