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Published: Tue, January 23, 2018
Economy | By Melissa Porter

Reliance Jio turns in first quarterly profit

Reliance Jio turns in first quarterly profit

And RIL reported net profit after tax (PAT) of Rs 504 crore for Q3 2018 as against net loss of Rs 271 crore during 2Q 2018, the immediate trailing quarter.

"Jio's strong financial result reflects the fundamental strength of the business, significant efficiencies and right strategic initiatives", Ambani said in a statement. "Jio has demonstrated that it can sustain its strong financial performance", he added. All the prepaid plans of Jio also offers Unlimited SMS and Unlimited data usage.

Jio, launched in late 2016, has amassed more than 160 million subscribers already through its cut-price 4G voice and internet services offerings which sparked a price war in India's cut-throat telecoms sector, driving down margins and forcing consolidation.

"Regulatory fiat in the form of a cut in domestic IUC rates has exacerbated the industry ARPU decline in Q3.The recent announcement of reduction in worldwide termination rates will further accentuate this decline and benefit foreign operators with no commensurate benefit to customers", Airtel CEO Goppal Vittal said. It, however, continues to offer free voice calls.

Airtel ended the quarter with a total customer base of 394.24 million, which includes 290.1 million mobile subscribers in India, 84.1 million across Africa and 2.1 million in South Asia. Not these two operators are providing unlimited plans with free calling and data, others are also providing the same but the difference is Airtel and Jio has many offers from which a user can choose the best one.

Jio has posted Average Revenue Per User or ARPU of Rs 154, which is again an industry high - In the same quarter, Airtel posted ARPU of Rs 123, which is 15% less than what they achieved a year ago. Expenses at Jio declined about 7% to Rs 6,108 crore in the October to December period.

Jio's spectacular performance came on the back of a pan-India distribution network of over 1 million retailers, its widespread 4G reach and VoLTE technology, which provides fast speed data streaming and allows to make calls through data.

Outstanding debt as on 31st December 2017 was Rs. 213,206 crore ($ 33.4 billion) compared to Rs. 196,601 crore as on 31st March 2017. Global ratings major Moody's estimated that Jio may invest another $23 billion in the next few years as the company looks to build a digital ecosystem. Jio, a wholly owned subsidiary of Ambani's Reliance Industries, reported a net profit of ₹504 crore in the December 2017 quarter. Refining and petrochemicals businesses contribute 90% of the consolidated profit.

"This quarter marks the culmination of our petrochemical expansion projects and the first positive net profit contribution from our newest business line - Digital Services", said RIL chairman Mukesh Ambani.

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