Reliance Jio emerges world’s largest telco by data usage; Q1 profit up 12%

Reliance Jio, India.s No. 1 telecom services provider, has become the world’s largest telecom operator by data usage, coinciding with its improved quarterly revenue and profit that beat market expectations.

About 45 exabytes of data was consumed on the telecom operator’s network in the quarter ended June, a 33% increase over last year.

“This makes Jio the world's largest operator in terms of data traffic and this is compared with all of the other operators (including China),” said Anshuman Thakur, head of strategy, Reliance Jio Infocomm Ltd.

Reliance Industries Ltd’s telecom entity beat market estimates clocking a 10.15% revenue growth from a year earlier and a 12% increase in net profit for the financial first quarter.

Average revenue per user (APRU), a key telecom industry metric, remained flat at ₹181.7 for a third consecutive quarter. 

But Reliance Jio, which captured a wide sweep of India’s telecom market with its highly discounted or even free services in 2016, said the 13-25% tariff hike it undertook last month would benefit both the company and the industry. 

“The benefit of the tariff hike will be seen in the coming quarters,” said Thakur. “This is going to be good for the overall telecom industry and help build a premier digital society and strengthen the overall sector.”

In sequential terms, net profit, at ₹5,445 crore, was up 2% from the March quarter, and revenue, at ₹26,478 crore, was up 2%. The company announced its results after market hours on Friday.

IIFL Securities had estimated Reliance Jio’s revenue to rise by around 10.6% and net profit to rise by 10.0% annually. 

It had estimated Ebitda (earnings before interest, taxes, depreciation, and amortization) growth on-year to be 11.6%. Jio’s Ebitda rose by the same percentage share to ₹14,638 crore from ₹13,116 crore during the corresponding quarter last fiscal year.

Jio’s ARPU

“ARPU was ₹181.7 with better subscriber mix, partially offset by increasing mix of promotional 5G traffic being offered on an unlimited basis to subscribers and not charged separately,” said the company in its exchange filing.

Analysts said the effect of tariff hikes by telcos last month will be visible in ARPUs starting from quarter ending September. Jio is yet to charge separately for 5G services.

Key numbers

The telecom company said growth in its revenue from operations “was primarily driven by robust subscriber growth across mobility and homes”.

Operating margin in the first quarter increased to 26.7% from 26.2% a year earlier and 26.3% in the previous quarter.

EBITDA margin fell 50 bps YoY to 49.7% in June quarter.

The telecom operator's total expenses rose 1.84% sequentially to ₹19,266 crore from ₹18,917 crore in Q4FY24, and 9.50% on-year from ₹17,594 crore in the same period the previous year.

Licencing and spectrum costs increased by 10.4% to ₹2,433 crore from ₹2,204 crore in the previous year and by 1.8% from ₹2,389 crore in the previous quarter.

As of the end of June, Jio's debt-to-equity ratio was 0.21 times similar to Q1FY24. The debt-to-equity ratio in Q4FY24 was 0.22 times.

Jio market share

According to an exchange filing, Jio continued to dominate the market and gain subscriber share with 8 million net additions in the first quarter of FY25. 

The monthly churn rate was 1.7%. 

Engagement levels were high, with total data and phone traffic growing by 32.8% and 6.6% year-on-year, respectively.

Jio's subscriber's status

According to the company's statement, Jio is the largest 5G operator outside China, with around 130 million users accounting for over 31% of Jio's wireless data traffic. The full 5G data is transported by Jio's proprietary 5G+4G combination core.

Strategic Progress

According to the company's filing, Jio announced new unlimited plans effective 3 July. These revised plans represent an increase of 13-25% over earlier plans. 

Jio will continue to deliver unlimited 5G data on its top plans at no additional cost, while JioBharat/JioPhone subscribers would continue to benefit from the current prices.

Jio Platforms also launched two new apps: JioSafe, a quantum-secure communication app for calling, messaging, and file sharing, and JioTranslate, an AI-powered multilingual communication tool for translating voice calls, voice messages, and texts. Jio members will receive both applications for free for a year.

The company stated that in the spectrum auctions held in June, Jio obtained more spectrum in the 1800 MHz band in Bihar and West Bengal, bringing its total spectrum footprint to 26,801 MHz (uplink + downlink).

Mukesh Ambani, chairman and managing director of Reliance Industries Ltd, said Jio’s True 5G network, covering about 85% of India’s 5G capacity, continues to attract users, while the fixed broadband offerings are witnessing increasing consumer traction both in homes and enterprises.

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