All Greens in Reliance Jio Q2 Results; ARPU up by 3.7%, Net Profits by 23.5%

On Friday, Reliance Industries Limited posted its results for the second quarter of the current fiscal. For the company's telecom operations, it was another quarter in the green as Reliance Jio Q2 Results reflect on a healthy balance sheet. Jio has become the first telco to post results; Airtel and Vi might follow up soon.

Jio Q2 Results Show Strong Financial Performance

According to the published report, the telco recorded a gross revenue of ₹23,222 crore, which, when adjusted for IUC, reflected a 15.2% hike. The EBITDA also showed a similar increase, reaching ₹9,294 crore with a +16.6%.  Along with this, the telco's net and cash profits also saw great leaps; the former was up by 23.5% while the latter recorded a jump of 18.2%.

The telco said that the a positive all-round performance in the second quarter was due to "continued subscriber traction in connectivity business".

The telco's average revenue per user, or ARPU, reached ₹143.6 per subscriber per month; it saw a "healthy" growth of 3.7%. The telco attributed the increase to "improving subscriber mix and increased customer engagement levels". In Jio Q2 results, the Mukesh Ambani-led operator has shown only positive financial performance; the growth reflects on the strong financial position of the telco, compared to the likes of Airtel and Vi.

Jio at the Top. For Now.

At the connectivity front, the telco has retained its top spot in terms of total subscribers. It reported a subscriber base of 429.5 million at the end of the quarter. Even though the telco managed to add 35.6 million new subscribers, it lost 11.1 million subscribers as well, bringing its net additions for the quarter to 23.8 million. The telco also said that the subscribers addition in Q2 is the highest in the last 7 quarters. On the other hand, the telco blamed the "COVID-led spike in churn of low-end subscribers" for the lost subscribers.

The ARPU of the telco also saw a good increase over the quarter; however, it has only the second best ARPU in the industry. Bharti Airtel had reported an ARPU of ₹146 in its Q1 report, and it had been widely expected to rise over the second quarter. Even though it reported "increased customer engagement levels", less than 80% of its users are active users. In that metric, the telco comes in third, behind Airtel and even Vi.

However, even though it has a lower customer engagement, the telco's voice & data traffic only rose. Jio's net data traffic grew by over 50% to reach 23 billion GB over Q2; its voice traffic saw a 17.6% rise to cross the 1 trillion minutes mark. Per user voice and data consumption reached 840 minutes and 17.6 GB, respectively.

Even though Jio Q2 Results show a very positive outlook for the telco, the telco won't probably have

Jio's Digital Ambitions

Jio was one of the first telcos to turn towards digital ecosystem in search of better cash flows. In the quarterly report, the telco mentioned its target to provide vehicle connectivity solutions.

The report said, "Jio has entered into partnerships with leading automobile OEMs in both two-wheeler and four-wheeler segments to provide automotive solutions designed to deliver an array of consumer and enterprise services".

The telco will provide hardware, software and connectivity solutions to work towards a V2X service. Powered by 5G, this can really turn into an opportunity for the telco as more and more automakers move towards connected, semi-automated and automated vehicles.

Still on the digital front, Jio has launched "Interakt", a chatbot solution which will allow MSMEs to handle their customers over WhatsApp. An API solution for WhatsApp Business, it will act as "an all-in-one CRM, campaign management, marketing automation tool, and a sales channel".

5G Trials and Reliance Jio

It has been apparent for a while now that since getting approval in June, the telco has been ahead of its counterparts in 5G Trials and developing use cases. While Airtel has developed and tested cloud gaming, Vodafone Idea has recorded highest speed this far over 5G, Jio was the first to actually test VoNR, one of the core use cases of 5G. It has also developed the full 5G stack for core and radio locally.

RIL reported that Jio will look for partners to deliver 5G services. For that, the telco will look for "global system integrators" and "SaaS providers".

The race 5G will most probably be very even till the time the government finally announced the 5G spectrum auction. However, till the time that happens, all the telcos can do is develop use cases to sell 5G in more and more ways.