Reliance Jio might be offering the cheapest data service among all telecom operators in the country, but it is also turning out to be a profitable business model for Mukesh Ambani-led Reliance Industries. The company reported its third quarter results today where Jio business posted its first ever quarterly profit.
Reliance Jio has reported a profit of Rs 504 crore for the quarter ending December against a loss of Rs 271 crore in the previous quarter. The company says it has a subscriber base of over 160 million users as on December 31, 2017 and managed to add 27.8 million gross subscribers and 21.5 million net subscribers in the third quarter.
The profits were mainly led by the growth in average revenue per user to Rs 154 per subscriber per month. The company says its Rs 399 tariff plan offering 1GB data per day for 84 days remains the most successful recharge plan. It also revealed that during the third quarter, the total wireless data traffic on its network touched 431 crore GB, meaning 9.6GB data usage per subscriber per month.
It also saw voice traffic of 31,113 crore minutes and video consumption surpassing 200 crore hours per month on the network. It says subscribers averaged 13.4 hours of video consumption per month. It also notes that the company is on track to achieve 99 percent population coverage during the year and emphasizes that its digital channels are showing customer acceptance.
“Jio’s strong financial result reflects the fundamental strength of the business, significant efficiencies and right strategic initiatives. Jio has demonstrated that it can sustain its strong financial performance,” Mukesh Ambani said in a released statement.
Reliance Jio, which began its journey in the country by offering free services for the first six months, seems to lack a proper revenue model at the start. However, the company has proved critics wrong by posting profit in just a year after its full-fledged operation in the country.
It also needs to be noted that Jio is yet to become a primary service provider for its consumers and reports suggest that most of its users rely on it for data only. The company’s subscriber addition has also slowed compared to its launch time frame and is yet to launch its FTTH service in the country.