Is new phone a drag on RIL Arpu?
Reliance Industries Ltd, during the September quarter (Q2FY24). Jio’s quarterly net subscriber addition continued to rise in Q2, helped by a lower churn and 5G launch to 11.1 million. For perspective, it stood at 9.2 million and 6.4 million in Q1 and Q4FY23.
“High growth in subscriber addition implies Jio has been able to make in-roads via JioBharat phone," analysts at Nuvama Research said in a report on 28 October. That said, it is still early days, and one needs to monitor user experience to see if it continues to drive subscriber additions. For JioBharat phone, price of the 28-day unlimited voice plan is 30% lower than other operators, besides offering seven times more data.
However, the growth in the average revenue per user (Arpu) has been underwhelming. In Q2, higher subscriber additions from a lower priced segment meant only 0.7% sequential rise in Jio’s Arpu to ₹181.70. Jefferies India’s analysts said Jio’s daily Arpu fell for the second quarter in a row, despite rising share of higher-Arpu home broadband segment in overall revenues.
“This suggests that Jio’s daily Arpu in the mobile segment is declining, potentially due to higher additions among lower-Arpu subscriber segment (JioBharat led)," said the analysts in a report on 28 October. The brokerage cut its revenue and Ebitda estimates for Jio by 1% over FY24-26. Ebitda, a measure of profitability, stands for earnings before interest, taxes, depreciation, and amortization.
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