Reliance Jio beat street estimates for average revenue per user (ARPU) in the fiscal fourth quarter thanks to user additions in the fixed line home broadband segment. However, the market leader in telecom has had to pay more for adding customers, highlighting the increased competition in the industry, which will postpone rate increases, according to analysts.
Reliance Jio announced on Friday that its fiscal fourth quarter net profit increased by 13% year over year to Rs 4,716 crore on the back of an 11.9% increase in operating revenue to Rs 23,394 crore.
Reliance Jio increased its subscriber base by 6.4 million over the course of three months, bringing it to 439.3 million by the end of March.
As selling and general administration (SGA) costs increased to Rs 530 crore in the quarter from Rs 500 crore in the fiscal third quarter due to continued competition, analysts added, Reliance Jio had to pay more for customer acquisition and retention.
According to ICICI Securities, the growth in the FTTH market contributed to an increase in data traffic on the network of Reliance Jio. The monthly per capita data consumption for the March quarter was 23.1 GB, up from 22.4 GB for the prior quarter.
According to IIFL, Reliance Jio’s recently released, affordably priced FTTH plan and its intention to concentrate on 5G fixed wireless access (FWA) during FY24 may give its home broadband market push a boost.
The impact of lower spectrum usage charges on earnings before interest, tax, depreciation, and amortisation (EBITDA) and net profit was offset by higher sequential SG&A costs combined with higher depreciation. The increase in capex for the year, which includes spectrum costs, from the previous year’s Rs 22,800 crore to Rs 33,500 crore was primarily due to the purchase of 5G spectrum.
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