Tariff Hikes Boost Reliance Jio ARPU
Motilal Oswal said that the Reliance Jio subscriber growth had slowed to 7.3 million in its second quarter, down from 10.8 million in the previous quarter. However, the firm highlighted that the operator’s average revenue per user (ARPU) improved 3% “benefiting from a tariff increase.” “Cumulative ARPU growth in the last four quarters has been moderate at 14%, against Bharti’s 27%, and average tariff hike at about 25%,” Motilal Oswal said in its report. “Nevertheless, its venture into multiple digital services, along with scope for ARPU improvement, offers ample growth opportunity.” The firm highlighted that the Jio Platforms is “keen to replicate its success in wireless” segment in “other business streams.” “With aggressive plans and product launches in place, Jio Platforms is creating multiple monetization opportunities in the Digital space,” Motilal Oswal said in its report. KRChoksey Institutional Research, a Mumbai based wealth management firm in a report on Monday said that the improvements in ARPU and subscriber addition aided Reliance Jio to register an enhanced consolidated revenues. “We believe the Jio business is likely to further benefit with tariff revision and incremental subscriber base,” KRChoksey Institutional Research said in its report. “Further, [a] strong balance sheet offers [a] lot of comfort for any future expansion (like 5G).”
Jio “Best-Positioned to Capitalize” on Vi Shutdown
Meanwhile, Dolat Capital in a report highlighted that the Jio net subscriber addition during its second quarter was “one of the slowest” and that its net additions were “lower than even lockdown quarter.” The trading firm on Saturday said in its report that Jio is “best-positioned to capitalize from improving industry scenario of mutually exclusive event of increase in industry ARPU.” Further, Dolat Capital said that Jio is also “best-positioned to capitalize” in the scenario of Vodafone Idea shutting down its operations. “With all the three telcos chasing to grab the 4G customers as well as burning cash to maintain the high level of voice mins/data usage per subscriber; we believe the time is ripe for all the telcos to raise the tariff table and compete at higher price points,” Dolat Capital said in its report. “This is inevitable in our view.”
