Jio's Q3 Results May have Disappointed, but Home Broadband is Thriving
They added that Jio's low (1.3 million net) mobile user additions despite it not raising tariffs for feature phone users last July was a «negative surprise».
Analysts, though, said the strong traction of Jio's home broadband services business, propelled by decent AirFiber user adds in Q3FY25 is an encouraging trend and would see further growth in coming quarters. «Jio's earnings before interest, tax, depreciation & amortisation (Ebitda) at ₹15,500 crore in Q3FY25 missed estimates due to a 55% sequential jump in access costs. Net profit too missed estimates due to lower margins and slightly higher D&A (depreciation & amortisation) and interest costs,» Jefferies said.
Analysts said the 30 bps (basis points) margin contraction to 52.8% was due to a sharp rise in Jio's access costs, while the 7.3% on-quarter rise in sales & distribution (S&D) costs in Q3FY25 underlined that telcos continued to incentivise mobile number portability through elevated channel payouts.
ICICI Securities, though, said expansion of Jio's 5G-based fixed wireless access (FWA) services business is impressive since over 70% of customer additions in Q3FY25 came from beyond the top 1,000 cities, which underlines pent-up demand for fixed broadband. Jio added two million home broadband users in the October-December period, its highest-ever in a quarter, led by improved traction in the FWA segment.
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