Reliance Jio Infocomm Ltd. reported a near flat profit growth in the March-ended quarter as the average revenue it earns from every user continued to fall amid price cuts in India's hypercompetitive telecom industry.
The popularity of its 4G-enabled feature phone also helped Jio add a “disproportionate” amount of users, according to a Morgan Stanley note. “We expect the momentum to continue over the next few months on the back of the sale of JioPhones.”
The JioPhone, which comes at a refundable deposit of Rs 1,500, has been India's best-selling feature phone this year. It has been driving mobile phone sales in the country even as smartphone shipments remained flat, according to research firm Counterpoint.
Jio's plans though are much bigger than just telecom, according to Probal Sen, research analyst at IDFC Securities. It wants to use its cheap data offerings to push digital content, he said. Internet consumption in India has nearly tripled since Jio’s launch.
During the quarter, Jio's parent Reliance Industries acquired almost 5 percent stake in Eros International Plc., that has a movie library of over 3,000 films in multiple Indian languages, to jointly produce and consolidate content in India. It also bought stake in New York-based music streaming service Saavn that owns rights to over 30 million songs, and merged Jio's own music app with it.
The launch of every new service, whether broadband or getting deeper into content, will continue to have the focus of investors, Sen added.
Other Highlights
- Jio added 95 lakh customers in March.
- Average data consumption per user per month was at 9.7 GB, while average voice consumption per month was at 716 minutes.
- Jio reported a churn rate of 0.25 percent per month. It claims it is the lowest in the industry
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