Reliance Jio Expects Higher Operating Margins Than Rival Operators
Reliance Jio Infocomm Ltd., India's youngest telecom carrier, anticipates operating margins of more than 50 percent, the highest in the industry.
In an analyst presentation, the telecom venture of Reliance Industries Ltd. said it incurs lowest capital and operational expenses per unit, explaining its projections for higher margins.
The comparative earnings before interest, tax, depreciation and amortisation (EBITDA) margins of Jio's top three rivals in India are in the range of 25-36 percent.
Also Read: Reliance Shares at 9-Year High After Ambani Revamps Holding
The company expects to capture half the market in the next three years and achieve more than 50 percent revenue market share by financial year 2020-21, it said in the presentation.
Brokerage Motilal Oswal Securities Ltd. expects Jio to achieve EBITDA break-even in financial year 2018-19 with a revenue of Rs 31,900 crore and an average revenue per user (ARPU) of Rs 240.
For the quarter ended December 2016, Bharti Airtel Ltd.'s ARPU was Rs 172, while that of Vodafone India Ltd. and Idea Cellular Ltd. was Rs 158 and Rs 157, respectively.
Reliance Jio has 6.4 percent of the total subscriber base, according to the December 2016 data provided by Telecom Regulatory Authority of India (TRAI). The company has been providing services for free and will start charging from April 1, 2017.
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Reliance Jio holds 854 MHz (megahertz) of spectrum across three circles and is the largest holder of fourth generation (4G) airwaves, and its network can support more than 60 percent of India's 2020-21 data demand forecast.
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