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Jio juggernaut marches on with 62 percent bottomline growth in Q3 2020

Jio's topline grew 28.2 percent y-o-y; added 1.48 net subs during Q3 2020

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BENGALURU: Mukesh Dhirbhai Ambani’s largest start up in the world, Reliance Jio Infocomm Limited (Jio) reported 62.5 percent growth in standalone profit after tax (PAT) for the period ended 31 December 2019 (Q3 2020, period or quarter under review) as compared to the corresponding year ago quarter Q3 2019 (y-o-y). The company reported standalone PAT of Rs 1,350 crore for Q3 2020 as compared to Rs 831 crore for Q3 2019. The company’s standalone EBIDTA (including other income) expanded 38.2 percent y-o-y to Rs 5,601 crore in Q3 2020 from Rs 4,053 crore. Jio says that it became a net recipient of access charges within 2 months of implementation of IUC tariffs, with outgoing traffic in overall offnet traffic reducing to 48 percent by end of quarter.

Further, the company’s standalone revenue from operations for the period under review grew 28.2 percent y-o-y to Rs 13,968 crore from Rs 10,884 crore in Q3 2019. Total income in Q3 2020 grew 28.5 percent y-o-y to Rs 13,986 crore from Rs 10,885 crore.

Jio reported a subscriber base of 37 crore as on 31 December 2019. Gross subscriber additions were 3.71 crore with a net subscriber addition of 1.48 crore during Q3 2020. The company says that the 2.2 crore subscribers that were lost were primarily excessively heavy voice users, and exited owing to implementation of IUC tariffs due to regulatory uncertainty. ARPU during the quarter was Rs 128.4 per subscriber per month Jio says that customer engagement continues to be robust with average data consumption per user per month of 11.1 GB and average voice consumption of 760 minutes per user per month.

Let us look at the other expenses reported by Jio

Amongst the major expenses incurred by Jio in Q3 2020 were network operating expenses, access charges, license fees and spectrum charges and net finance costs.

Jio’s standalone network operating expenses increased 38.7 percent y-o-y in Q3 2020 to Rs 4,423 crore from Rs 3,190 crore in the corresponding year ago quarter.  Standalone access charges reduced 4.2 percent y-o-y during the period under review to Rs 1,442 crore from Rs 1,506 crore in Q3 2019. Standalone license fees and spectrum charges increased 30.5 percent y-o-y during the quarter to Rs 1,483 crore from Rs 1,136 crore. Standalone net finance costs in Q3 2020 increased 79 percent y-o-y to Rs 1,953 crore from Rs 1,091 crore in Q3 2019.

Standalone employee benefit expense in Q3 2020 declined 26.3 percent y-o-y to Rs 314 crore from Rs 426 crore. Standalone selling and distribution expense in Q3 2020 increased 20.3 percent y-o-y to Rs 356 crore from Rs 296 crore. Standalone other expenses in the period increased 32 percent y-o-y to Rs 367 crore from Rs 278 crore.

Company speak

Reliance Industries Limited (RIL) chairman and managing director Ambani said; “Jio has continued on its unprecedented growth journey receiving overwhelming customer response for best in class mobile connectivity services. We are delivering on our promise to be the driver of digital revolution in the country. Jio is also determined to redefine the wireline infrastructure, home entertainment and enterprise market in India with its FTTx services which bundle best-in-class connectivity with bouquet of digital content and services. To drive the next leg of growth, a truly transformational and disruptive digital services company has been set-up which will bring together India’s No.1 connectivity platform, leading digital app ecosystem and world’s best tech capabilities, for creating a truly Digital Society for each Indian.”

Jio Platforms Limited

Jio says in an earnings release that Jio Platforms Limited will hold all digital platforms including the connectivity platform i.e. Reliance Jio Infocomm Limited. Total capitalisation of Jio Platforms Limited is Rs 1,70,000 crore. The release says that the capital and organisation structure of Jio Platforms Limited has been benchmarked with global technology players.

The Jio release also states that it has been developing and fostering a vibrant digital ecosystem through various digital applications, tools and platforms spanning self-care, information, entertainment, chat, utility tools etc. The release further states that Jio continues to focus on technology enabled emerging digital platforms that enable and accelerate digital society – healthcare, education, agriculture, commerce, gaming, government to citizen services, and many more. The company says that the platforms are also backed by investment in next-gen technologies like blockchain, AI/ ML, AR/ MR, edge computing.

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