Reliance Jio Q1 net profit rises 24% to Rs 4,335 crore as tariff hikes boost realisation

New Delhi: India's largest telecom operator Reliance Jio Infocomm on Friday reported a nearly 24 per cent rise in its June quarter net profit to Rs 4,335 crore as tariff hike and improved subscriber mix boosted revenues and realisation.

Billionaire Mukesh Ambani-led Reliance Jio clocked revenue from operations of Rs 21,873 crore in the just-ended quarter, which was 21.5 per cent higher than the year-ago period, according to a filing.

Jio's Q1 performance was bolstered by tariff hikes of December 2021, and the number of active users on its network too has been improving.

The company also recorded an acceleration in FTTH (Fiber to the home) momentum.

The standalone net profit for the June quarter was up 23.8 per cent at Rs 4,335 crore against Rs 3,501 crore in the year-ago period.

Seen sequentially, the net profit was almost four per cent higher than Rs 4,173 crore logged in the March 2022 quarter.

The operating profit margin for the just-concluded June quarter stood at 26.2 per cent, slightly higher than the corresponding quarter last year. The net profit margin for the June 2022 quarter came in at 16.9 per cent, which was up 40 bps (basis points) from the same period last year.

"Customer engagement on our digital services platform remains high," Mukesh Ambani, Chairman and Managing Director, Reliance Industries said in a statement.

Jio is working towards expanding data availability for all Indians, Ambani said adding "I am pleased to see the positive trends in mobility and FTTH subscriber additions".

For Jio Platforms - the unit that holds telecom and digital businesses -- the consolidated net profit for June 2022 quarter was Rs 4,530 crore, higher by about 24 per cent year-on-year.

Jio Platforms' consolidated gross revenue for the quarter stood at Rs 27,527 crore, rising 23.6 per cent year-on-year.

The quarterly operating revenue (net of GST) was Rs 23,467 crore, a growth of 24 per cent, driven by the residual impact of tariff hike and acceleration in FTTH (Fibre to the Home).

Average Revenue Per User or ARPU - a key monitorable metric for telcos - of Rs 175.7 per subscriber per month during the quarter saw a healthy 27 per cent growth on a y-o-y basis and 4.8 per cent growth on a sequential basis. The company attributed the improvement in average realisations to higher customer engagement.

The total customer base as of June 30, 2022, was 419.9 million.

Net subscriber addition saw a strong rebound to 9.7 million driven by continued strength in gross adds (35.2 million in Q1 FY23) and reduced SIM consolidation impact, the company said in a statement.

Total data traffic was 25.9 billion GB during the quarter, higher by 27.2 per cent year-on-year. The total voice traffic was 1.25 trillion minutes during the quarter, up 17.2 per cent over the year-ago period.

Jio continued to extend gains in FTTH services with further acceleration in homes connected. As per industry data published by the sector regulator, Jio has over 80 per cent market share of new customer additions in the wireline segment.

"By a clear distance, we continue to be number one ranked operator in India with almost 420 million customer base in June...In terms of the customer market share that would translate to 53 per cent of the total market...," Kiran Thomas, President of Reliance Jio Infocomm said during a Q1 earnings presentation.

On 5G, Thomas said that the company has created a fully indigenous and homegrown 5G stack.

"This not just is the 5G core network elements, but also moving to all of the other elements that are required to operate a 5G network...And obviously, this will be deployed at scale within the Jio network, to begin with, but on the back of that success we fully feel confident...these product lines will create a new revenue line as we are able to take this to other markets even outside India," Thomas added.

These elements have been deployed in the Jio network, and besides rigorous compliance tests and field trials, Jio's 5G stack has also seen successful external validation.

"We have also taken these elements and their use through the regulatory bodies, as well as the Department of Telecom. And they have seen all of the use cases that we have been able to trial on our network already, and we have taken a sign-off for this equipment to be now deployed at scale," he said.

"This has been done in nine cities in the country, including Mumbai and Delhi and obviously a few other cities where we anticipate that we'll be introducing these services, initially." The Indian telecom market is poised for 5G services that will usher in ultra-high speeds (about 10 times faster than 4G) and bring new-age offerings and business models.

The countdown to 5G spectrum auctions has begun, and a total of 72 GHz (gigahertz) of radiowaves worth at least Rs 4.3 lakh crore will be put on the block during the upcoming auction, scheduled to begin on Tuesday, July 26.

Besides Reliance Jio, Bharti Airtel, Vodafone Idea, and a unit of billionaire Gautam Adani's flagship Adani Enterprise Ltd are set to participate in the auction of the 5G spectrum.