Mukesh Ambani’s Reliance Jio Infocomm Ltd. turned profitable within 15 weeks of launch after interrupting the world’s second-largest telecom marketplace by sparking a tariff war and forcing consolidation.
Jio reported a net profit of Rs 504 crore in the quarter. 12 percent sequentially increased to Rs 6,789 crore.
- Operating profit rose 82 percent to Rs 2,628 crore.
- Operating margin expanded nearly 15 percentage points to 38.2 percent.
Reliance Jio earned an average revenue of Rs 154 . Its ARPU declined marginally from the previous quarter from the industry-high of Rs 156.
Jio benefited from the Telecom Regulatory Authority of India’s decision to reduce interconnect fee–for completing calls by rival network subscribers, which operators earn–to 6 paise a minute. Operators like Reliance Jio who have a reach that is relatively narrow usually wind up paying more usage charges.
Reliance Jio began after offering six months of free services charging users. It provides the data plans. As competition rose, Vodafone India and Idea Cellular Ltd. agreed to unite. After acquiring the India operations of Telenor Bharti Airtel is taking over the mobile services business of Tata Group. Reliance Jio itself bought the mobile business of Anil Ambani-led Reliance Communication .
The Mukesh Ambani-led firm has been gaining customers at the expense of rivals. Jio has accumulated more than 16 crore subscribers according to its own media release despite being the newest entrant.