Reliance Jio, India's newest and fastest-growing service provider, posted a profit of 9.9 billion Indian rupees ($139.19 million) in the recent September-ending quarter, as 24 million new subscribers joined the network. Operating revenues were up 33.7% compared with the year-earlier period, touching INR123.5 billion ($1.73 billion).
"RJio crossed the 350 million subscriber mark to remain the world's fastest-growing digital services company, and we are still adding more than 10 million new customers every month," said Mukesh Ambani, the chairman and managing director of parent company Reliance Industries, in a statement. "RJio is not only India's largest telecom enterprise in terms of subscribers and revenues but has also become the digital gateway of India."
The performance means RJio now boasts a market share of 34.8%, based on the number of subscribers at the end of August 2019, according to data released by Telecom Regulatory Authority of India (TRAI). RJio has added 103 million customers in the last 12 months.
Yet despite growth in the number of subscribers, the operator's average revenue per user (ARPU) fell for the seventh consecutive quarter. New subscribers are contributing less to the company's revenues. Many have continued to use it as a second SIM to benefit from its lower tariffs. Data consumption is higher than on rival networks even though RJio's customers are spending less.
Monthly ARPU was just INR120 ($1.68) in September, down from INR126.2 ($1.7) in the March-ending quarter and INR122 ($1.71) in the June one. Airtel and Vodafone Idea, its main rivals, have yet to announce recent results, but they have recorded higher ARPU than RJio in the last few quarters. Airtel's was INR129 ($1.8) in the June-ending quarter and INR123 ($1.72) in the March one.
Both Airtel and Vodafone Idea have decided to let go of low-paying subscribers by launching minimum recharge plans. This strategy has helped to boost ARPU as those customers quit their services. Yet both operators continue to post losses.
RJio's recent announcement that it will charge INR0.06 per minute for calls made to other networks may help to improve service revenues provided users stick with the operator. It breaks an initial promise that RJio would never charge for voice calls but could help the entire industry when it comes to ARPU growth.
After shaking up the mobile broadband market, RJio is now hoping to be as disruptive in the home broadband, enterprise business and Internet of Things (IoT) sectors.
— Gagandeep Kaur, contributing editor, special to Light Reading