Jio Turns Profitable; Reports Rs 504 Crore Profit For December Quarter!

Reliance Industries declared their financial and operational performance for the third quarter of 2017-18, and there is some huge cheer for Reliance Jio within that.

For the first time ever, Reliance Jio has churned out a profit, and this is indeed a very significant development.

Against revenues of Rs 6,879 crore in Q3FY18, Jio has reported a net profit of Rs 504 crore, which is more than what any other telecom operator in India has achieved!

This revenue is 12% higher than last quarter when they reported a net loss of Rs 271 crore.

Besides, Jio has reported a net rise of 15.8% in subscribers base, which is again a substantial gain compared to other telcos.

While announcing their financial results, Mukesh Ambani, chairman and MD of RIL, said,

“I would like to thank all our customers for partnering with us in this revolution which has made India a global digital powerhouse. I congratulate all our employees and partners for the strong performance. Jio’s strong financial result reflects the fundamental strength of the business, significant efficiencies and right strategic initiatives. Jio has demonstrated that it can sustain its strong financial performance,”

Overall, Reliance Industries posted a profit of Rs 8,454 crore, which is 5% more than last year’s Q3, when they reported a profit of Rs 8,022 crore. RIL’s standalone revenues increased to Rs 75,913 crore from Rs 66,607 crore in the same period, which is a rise of 14%, year on year.

Reliance Industries’ main profits came from their flagship ventures which are refining, petrochemicals and oil & gas; however, Jio’s tiny profit of Rs 504 crore is significant in several ways.

We will now share 5 interesting highlights from their financial results, which proves that Jio is now way ahead of the curve, and on the way to becoming a formidable force to reckon with:

#1 Jio Turns Profitable In Just 15 Months

Jio started their commercial venture in September 2016 and had reported their financial health from July-September quarter, despite offering free services. They started charging for their services from April 2017 onwards. Hence, for the first time in the history of Indian telecom, a company posted profit within 15 months of their commercial launch; and if we consider April as their first month of paid services, then within 9 months!

This is unprecedented, and investors all over India are actually pleasantly surprised.

#2 Jio Beats Airtel In Profits

Now, Airtel is a 22-year old behemoth, hailed as India’s largest telecom operator in terms of users and infrastructure. Jio is a mere 15-month-old newbie. Still, in terms of profits for Q3 of 2017-18, Jio has beaten Airtel; and this is a fact which will haunt Airtel for a long, long time.

Compared to Jio’s Rs 504 crore profit, Airtel has posted Rs 306 crore profit, and this shows and expresses so many things.

#3: Jio’s ARPU Is More Than Airtel’s

Jio has posted Average Revenue Per User or ARPU of Rs 154, which is again an industry high – In the same quarter, Airtel posted ARPU of Rs 123, which is 15% less than what they achieved a year ago.

Now, there is a business strategy of Jio behind that: If we observe closely, then we will find that the maximum number of users on Jio network are in the range of Rs 309/399 tariff package; which despite projecting themselves as ‘free’ and ‘cheap’, is a commendable job.

Such high ARPU within 15 months of operations means that they are doing something right.

#4 Jio Users Consume More Data Than Airtel

In the 3rd quarter of 2017-18, Jio users consumed a total of 431,00,00 million MB of data which is way, way higher than Airtel’s total consumption of data, which was  110,58,39 million MB data.

Jio’s total data consumption has increased by 14% compared to last quarter, whereas Airtel’s has decreased.

At the same time, average data usage per user in Jio’s network was 9600 MB, which is again way higher than Airtel, where an average consumer consumed 5349 MB of data.

#5: Jio Users Consume More Voice Minutes Than Airtel

On an average, a Jio user talked for 694 minutes in the Q3 of 2017-18, which is more than Airtel’s average per user which was 575 minutes.

Overall, Jio added a total of 21.5 million (net) new users in their network, which makes their total subscriber base as 160.1 million at the end of December 2017.

Besides, Jio’s monthly churn rate is 1.4%, which is lowest in the industry.

The industry is now keenly awaiting Airtel and Vodafone-Idea’s next move now.

Meanwhile, congratulations to Jio!