Here’s good and bad news for Reliance Jio: 8 things to know

For the first time since Reliance Jio Infocomm started reporting quarterly earnings, analysts are forecasting Jio’s average revenue per user (ARPU) to fall below Bharti Airtel’s. ARPU is one of the key performance metric for any telecom company. However, while this may not be good news for India’s youngest telecom company, analysts alsi have some positive forecasts for the company. Read on to find out the good and bad news for Reliance Jio

​Reliance Jio's average monthly ARPU in the April-June period is likely to drop

Reliance Jio’s average monthly ARPU in the April-June period is likely to drop

The Mukesh Ambani-led company’s average monthly ARPU in the April-June period may drop to Rs 124, declining for the seventh straight quarter and less than Airtel’s estimated Rs 127. ARPU is a key performance metric for any telcos. The main reason, as per analysts is that the country’s youngest telco attracts low revenue-generating customers in the hinterland through its cheap VoLTE feature phone. Axis Bank expects Jio’s operating income to drop 16% sequentially to Rs 3,631.2 crore in the June quarter and its Ebitda margin to contract to 30.3% from 39% in the previous three-month period

​Reliance Jio's ARPU may decline 2% sequentially

Reliance Jio’s ARPU may decline 2% sequentially

Axis Capital estimates “Jio’s ARPU will decline 2% sequentially to Rs 124 due to a mix change,” driven by additions of users generating monthly ARPU of Rs 99. Rajiv Sharma, co-head of research at SBICap Securities told economic times that Jio’s monthly ARPU could “remain subdued as it continues to only add marginal customers, although things could change if it ramps up visibility on the postpaid and enterprise business domains, or rings in a quick tariff hike.”

​Airtel recently rolled out minimum recharge plans to improve ARPU

​Airtel recently rolled out minimum recharge plans to improve ARPU

Airtel has introduced minimum recharge plans over the past two quarters to weed out low-revenue generating customers. Airtel has scrapped its Rs 299 and Rs 399 monthly plans and made Rs 499 the entry price-point for its higher-paying users who make up 5-7% of its 284 million subscribers and contribute 20-25% of its revenue.

​Reliance Jio's operating cost may increase after the creation of infrastructure investment trusts (InvITs)

​Reliance Jio’s operating cost may increase after the creation of infrastructure investment trusts (InvITs)

Earlier this year, Jio transferred its tower and fibre network assets to two special purpose vehicles owned by the two InvITs. In April, parent Reliance Industries said the two trusts had acquired 51% stakes each in Jio’s fibre and tower units – Jio Digital Fibre and Reliance Jio Infratel……….Read More>>

 

Source:- gadgetsnow

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