Reliance Jio posts another profitable quarter, plans to invest in more startupsSohini Mitter
Investors believe Reliance Jio's rising share in the telecom and internet space will redefine media and digitainment in India.
Reliance Jio Infocomm posted its second successive profitable quarter in less than two years of its launch. Parent Reliance Industries Limited announced that Jio had made a profit of Rs 510 crore for the quarter ended March 31, while its average revenue per user (ARPU) continued to fall in an increasingly competitive domestic telecom market.
Though the ARPU fell to Rs 137 during the quarter, Jio’s revenue grew 3.6 percent quarter-on-quarter to reach Rs 7,128 crore. In 2017, Jio’s ARPUs had hit a sector-high of Rs 156. A fall in the industry’s overall ARPUs has been triggered by the slashing of tariffs by telcos in their bid to rival Jio, which disrupted the market a year ago with its ‘effectively free’ offering.
Jio has notched up 168 million mobile subscribers in less than two years, making it the fastest-growing telecom network in the world. Its broadband base stood at 18.6 million at the end of the fourth quarter. Reliance has invested over $30 billion in Jio Infocomm so far, and is now turning its attention to the allied ecosystem with investments in devices, startups, content platforms, and more.
Last month, Jio raised $500 million from a consortium of Japanese banks to fund its capital expansion. “Jio will bring transformational changes in the Indian digital services space to enable the vision of Digital India for 1.2 billion Indians and propel India into global leadership in digital economy,” Reliance said in a statement.
The telecom operator also invested in music-streaming service Saavn and merged it with Jio Music to create a $1 billion platform. Jio followed that with an investment of $180 million in AI-led edtech platform Embibe. It now owns close to a three-fourth stake in the startup. Furthermore, Jio is said to be scouting for potential investment opportunities in healthcare, fintech, transportation and travel, and content and entertainment startups.
In a prior conversation, Pankaj Makkar, MD, Bertelsmann India Investments, an investor in Saavn, had told YourStory:
“India’s digital media segment is undergoing a massive transformation. I am confident that Jio’s increasing telecom and internet market share will redefine media and digitainment for a New India.”
Reliance Industries Chairman Mukesh Ambani has, in the past, stated that Jio 4G would penetrate 99 percent of India in the next couple of years. What Jio is also doing in addition to that is aggregating a suite of products and services that can transform it into a digital behemoth from just a telecom network.
Besides the startup investments, there is also a low-cost smartphone for which it is working with Qualcomm.