Reliance Jio posts ₹1,350 crore net profit in December quarter, ARPU rises

NEW DELHI: Reliance Jio Infocomm Ltd, India’s largest and only profitable telecom operator, reported a 62.5% year-on-year rise in net profit to ₹1,350 crore for the December quarter, on the back of its move from free voice calling to imposing user charges for calls made to other operators.

The company’s operating revenue rose 28.3% y-o-y to ₹13,968 crore, while its average revenue per user (ARPU) rose to ₹128.4, after successive declines in the last seven quarters, following its decision to charge for calls made to rival networks at 6 paise per minute. It had 370 million subscribers as of December-end.

ARPU is the total revenue of the operator divided by the number of users or connections on its network. From ₹154 in the December 2017 quarter, Jio’s ARPU steadily declined to ₹120 in the September 2019 quarter.

On October 10, Jio said it would charge users 6 paise a minute for calls made to other networks to account for interconnect usage charges (IUC) that it has to pay to rival operators.

The operator said in October that it “had been compelled, most reluctantly and unavoidably”, to make the shift after the Telecom Regulatory Authority of India’s (TRAI) decision to review the date for scrapping IUC from 1 January, 2020, led to regulatory uncertainty. “Jio became a net recipient of access charges within two months of implementation of IUC tariffs, with outgoing traffic in overall offnet traffic reducing to 48% by the end of the quarter. This was combined with associated elimination of excessively heavy voice users, with underlying churn remaining stable,” Jio said on Friday.