Reliance Jio’s Q4FY21 results were subdued as the company missed analysts’ estimates and the operating metrics came in below expectations. The biggest surprise was the net addition of 15.4 million subscribers, sequentially, which was way above analysts’ expectations of 7 million additions and which took the total subscriber base to 426.2 million.
The company’s net profit remained flat at Rs 3,508 crore while revenues declined 6.1% to Rs 18,278 crore compared with the preceding quarter. This was attributed to the change in the interconnect usage charges (IUC) regime to the bill and keep regime effective January 1.
The company’s Ebitda was up only 1% at Rs 8,573 crore primarily due the pressure on the Arpu (average revenue per user). The company’s Ebitda margins, however, increased 330 basis points to 46.9% during the quarter.
Arpu for the quarter declined sharply by 8.4% sequentially to Rs 138.2, driven by transition from Interconnect Usage Charges (IUC) to Bill & Keep regime effective January 1, 2021, and lower number of days during the quarter. Analysts had estimated an Arpu of about Rs 141.
Jio’s data traffic at 1,66,80,000 was up 5% quarter-on-quarter. Data usage per customer, per month, though up 3% sequentially to 13.3 GB, grew slower compared to last quarter when the growth was 7.5%.
Jio’s voice volume at 10,32,900 minutes registered an increase of nearly 6% compared to the preceding quarter. Usage per customer at 823 minutes per month registered an increase of nearly 3.3% sequentially.
Jio’s monthly churn significantly improved during the quarter to 1.26% against 1.63% in the preceding quarter. It attributed it to focused sales initiatives and reducing Covid impact in parts of the country during the quarter.
The total customer gross additions stood at 31.2 million, above the gross adds of 25.1 million in the preceding quarter.
The company said that in the recently concluded spectrum auctions, Jio acquired spectrum in 800 MHz, 1800 MHz and 2300 MHz bands. The total outlay for this spectrum is Rs 57,123 crore with an upfront payment of Rs 19,939 crore. Subsequently, Jio signed definitive agreement with Bharti Airtel, for trading of right-to-use spectrum in the 800MHz band in Andhra Pradesh, Delhi and Mumbai circles. The aggregate value for right-to use of paired 7.5 MHz spectrum is Rs 1,497 crore, inclusive of present value of associated deferred payment liability of Rs 459 crore.
Commenting on the performance, Mukesh Ambani, chairman, Reliance Industries, said, “Jio has a highly engaged 426 million customer base and remains committed to enhancing digital experiences not only for our existing customers but, for all individuals, households, and enterprises across the country. With its path defining partnerships over the last couple of years, Jio will continue to strive towards making India a premier digital society.”