Jio reports Steady quarter
The subscriber addition traction remained healthy as the company added 7.7 million (mn) subs. ARPU, however, saw muted growth of 0.9% QoQ at Rs 177.2 (our expectations Rs 181), possibly with only benefits of extra day during the quarter flowing through while subscriber mix (higher data usage driven ARPU upgrades) possibly saw no improvement, as per our view. Revenues, EBITDA were at Rs 22521 crore, Rs 11489 crore, up 3%, up 4.8% QoQ, respectively. Margins were at 51%, up 90 bps QoQ, owing to better-than-expected flow through of lower spectrum usage charges. PAT at Rs 4518 crore, up 4.2% QoQ, was a tad lower than expected owing to higher than anticipated depreciation.
We believe superior spectrum portfolio along with superior digital ecosystem offering lends Jio a competitive advantage even in 5G (as seen in 4G foray). The near term monitorable would be when and how much the next tariff hike is undertaken as most incremental 5G benefits of industry use cases are still at least two to three years away. The telcos, thus, need to take a tariff hike in the near term to compensate for near term cash outflows.