Q1 earnings could make Reliance Jio second largest telco by RMS

Jio added 28.7 subscribers Q1 2019.


MUMBAI: In the 1st quarter of FY 2018, Reliance Jio’s operating revenue increased 14.6 per cent quarter-on-quarter (q-o-q). On the back of its strong earnings number, the telco operator could emerge as the second-largest telco by revenue market share (RMS) in the April-June quarter displacing Vodafone India which is in the final stages of merging with Kumar Mangalam Birla-led Idea Cellular.

As per brokerage CLSA's estimation Jio’s RMS would have increased by 3 percentage points to 23 per cent in the April-June period, following the positive surprise on the average revenue per user (ARPU) front that was 13 per cent ahead of its estimates, according to a report from Economic Times.

Amid the tarrif war started by Jio, both Vodafone and Idea Jio added 28.7 subscribers Q1 2019  are losing ground in the telecom market. The speedy closure of the merger would help the combined entity as it will emerge as the country’s largest telco with the highest RMS of 37 per cent. However, as Jio is unlikely to raise tarrif soon, analysts expect the bad financial phase of Bharti Airtel and Vodafone-Idea merged entity to continue.

Jio is in no mood to raise tariffs anytime soon as it’s adding 9-10 million subscribers per month, delivering strong minutes, data traffic and revenue growth, which is bad news for Bharti Airtel and the (emerging) Vodafone-Idea combined entity, who need to offer some resistance by raising large sums of capital to accelerate 4G network build and also start matching Jio on tariffs,” JM Financial said in a note to clients as mentioned by ET.

Jio added 28.7 subscribers Q1 2019 and hence its subscriber base increased to 215.3 million in Q1 2019 from 186.6 million in Q4 2018. ARPU declined slightly q-o-q to Rs 135.50 per month in Q1 2019 from Rs 137.1 per month in Q4 2018. The company reported subscriber churn of 0.3 per cent per month in Q1 2019 as compared to a slightly lower 0.25 per cent per month in Q4 2018.

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