Reliance Jio posts net profit of Rs 4,173 crore, largely in line with estimates
In the corresponding quarter last year, the company posted a net profit of Rs 4,173 crore. A CNBC-TV18 poll had predicted a profit of Rs 4,400 crore for the quarter under review. The company has announced that it will deliver high-performance satellite-based broadband services across India, launch a next generation multi-terabit subsea cable project — India-Asia-Xpress (IAX) — to connect the Maldives directly to India and Singapore, and has conducted extensive 5G field tests during the quarter.
Reliance Jio, the telecom arm of Reliance Industries Ltd (RIL), on Friday reported a net profit of Rs 4,173 crore for the fourth quarter of the 2021-22 financial year that ended on March 31, 2022. A CNBC-TV18 poll had predicted a net profit of Rs 4,400 crore for the quarter under review.
India's largest telecom operator has reported earnings before tax, depreciation, and amortisation (EBITDA) at Rs 10,510 crore versus an expectation of Rs 10,500 crore. The EBITDA margin came in at 50.3 percent percent versus the poll reading of 50.5 percent. Cash profit for the year was Rs 34,639 crore, a growth of 21.6 percent, the company said, adding that this figure stood at Rs 9,623 crore for the quarter (up 24 percent)
Nitin Soni, Senior Director of Corporates at Fitch Ratings, said the results were in line with their expectations. “Given the fact that revenue and EBITDA have increased and margins are at all-time high shows that there must have been some subscribers mostly at the expense of Vodafone-Idea," Soni said.
ARPU
The average revenue per user (ARPU), too, is in line with expectations coming in at Rs 167.6 versus an expectation of Rs 167.5, as per CNBC-TV18 poll. This was an increase from the Rs 151.5 ARPU reported in the previous quarter. The gross revenue for the quarter was Rs 20,901 crore, down from Rs 24,176 crore reported in the December quarter. The gross revenue was slightly higher than the poll estimate of Rs 20,800 crore.
The fourth quarter of the 2021-22 financial year saw Reliance Jio's subscriber base fall to 410.2 million, down 11 million from the previous quarter. The total data traffic was 91.4 billion GB for the year, a 46.3 percent growth, and 24.6 billion GB during the quarter (up 47.5 percent). The total voice traffic stood at 4.51 trillion minutes during the year, up 17.9 percent, 1.2 trillion minutes during the quarter in review, a 16.8 percent improvement.
Soni of Fitch Ratings said he expects a gradual rise in Jio's ARPU. "There will be a number of occasions in the next 12-24 months to raise tariffs. Some of the customers are still low ARPU customers, and when they come to the 4G network, the overall ARPU will improve,” he said.
Extensive 5G trials
Jio said it had conducted extensive 5G field trials across eight states testing a comprehensive suite of products. The peak user throughput achieved was over 1.5Gbps in these trials, Jio said, adding that multi-vendor interoperability and interworking have also been verified.
Undersea cable in the Maldives
The company announced the launch of a next-generation multi-terabit subsea cable project, India-Asia-Xpress (IAX), to connect the Maldives directly to India and Singapore. The IAX system will originate in Mumbai and connects directly to Singapore, with branches including additional landings in India, Malaysia and Thailand. IAX is expected to be ready for service by end of 2023.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited, said: “Despite the ongoing challenges of the pandemic and heightened geopolitical uncertainties, Reliance has delivered a robust performance in 2021-22. I am pleased to report strong growth in our Digital Services and Retail segments.”
Next-generation, affordable broadband
Jio Platforms Limited (JPL), a subsidiary of Reliance Jio Infocomm Ltd, and SES, a leading global satellite-based content connectivity solutions provider, announced the formation of a joint venture — Jio Space Technology Limited — to deliver high-performance satellite-based broadband services across India. The JV will use multi-orbit space networks capable of delivering multi-gigabit links and capacity to enterprises, mobile backhaul and retail customers.
Metaverse plunge
JPL has also announced an investment of $15 million in Two Platforms Inc (TWO), a Silicon Valley-based deep tech startup, for a 25 percent equity stake on a fully diluted basis. TWO is an Artificial Reality company with a focus on building interactive and immersion AI experiences. It will work collaboratively with Jio to fast-track the adoption of new technologies and build disruptive
technologies such as AI, metaverse, and mixed realities.
Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
First Published: May 6, 2022 5:32 PM IST
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