- 24 Apr 2023
- ICICIdirect Research
RELIANCE JIO REPORTS FLATTISH ARPU; LOWER NETWORK EXPENSES AID MARGINS
News: The subscriber addition traction remained healthy as the company added 6.4 million (mn) subs (in line with expectations). The ARPU was flattish QoQ at Rs 178.8 (our expectations Rs 179.3), as subscriber mix (higher data usage driven ARPU upgrades) was offset by lower number of days during the quarter. The revenues and EBITDA were at Rs 23394 crore, Rs 12210 crore, up 1.7% QoQ, each. Margins were at 52.2%, flat QoQ and a tad higher than our estimates of 51.6%, owing to lower network opex (that was surprising despite aggressive 5G rollout). PAT at Rs 4716 crore, up 1.7% QoQ, was ahead of expectations as interest expenses were flattish despite higher debt (possibly capitalised during Q4)
View: Pan India 5G rollout target of December 2023 is on track with Jio having launched 5G during Q3 and 5G coverage has expanded to 2300+ towns and cities, till date. The company continues to see 5G as medium to long term enabler of higher data usage and APRU driver along with its dedicated efforts to catch up on postpaid offerings (by new plan launches) where it currently lags incumbents. Furthermore, it highlighted its intent to aggressively expand broadband coverage (targeting 100 mn customer in two to three years vs. current base of ~9 mn) both through new plans and fixed wireless access (likely to be launched when 5G reaches critical mass). It also continues to build on enterprise use case both for large enterprises and small and medium businesses
Impact: Positive