India’s newest and only profitable telecom operator Reliance Jio Infocomm Ltd has overtaken rival Bharti Airtel to become the second largest operator in terms of mobile subscriber base, data from the Telecom Regulatory Authority of India, made public on Friday, showed. As of May end, Jio had 322.98 million users as against Airtel’s 320.38 million users.
Vodafone Idea continues in the top position with 387.55 million users.
The subscriber numbers include active as well as inactive connections.
Jio had entered the sector in September 2016 and disrupted the industry with cheap tariffs, forcing other smaller operators to shut shop or get acquired.
Later today, Jio’s parent Reliance Industries will announce its financial results for April-June quarter. Jio had reported a profit of ₹8.4 billion for the March quarter on operating revenue of ₹111 billion. It had a subscriber base of 306 million as of March end.
Jio is expected to show improved revenue on the back of strong subscriber additions, but its average revenue per user (ARPU) may decline given that a chunk of these additions comprise low-paying users.
Goldman Sachs expects Reliance Industries’ telecom arm to report a revenue of ₹119 billion with 329 million subscribers, while ARPU is expected to drop to ₹125.
Though Jio has witnessed a continuous drop in its average monthly billings over the past five quarters, it still outperforms its rivals on this metric. From Rs154 in the December 2017 quarter, Jio’s ARPU fell 15.6% to ₹130 in the same quarter in 2018 and to ₹126.2 in the March 2019 quarter.
ARPU is the total revenue of the operator divided by the number of users or connections on its network.
Comparatively, Airtel’s ARPU for the March quarter was ₹123, an 18.6% increase from ₹104 in the December quarter. Vodafone Idea lags behind these two, with its ARPU at ₹104.
At a time when its rivals are weaning away bottom-of-the-pyramid subscribers by launching minimum recharge plans and improving their ARPU, Jio continues to widen its subscriber base by adding low-paying users on its network.
“RJio ARPU will be soft as more JioPhone users are added at low price points. However, strong subscriber addition for RJIo to lead to higher Q1 revenue,” Axis Capital said in a report dated 3 July.
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