IUC Boost: Reliance Jio net profit up 36.4% in December quarter

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Published: January 18, 2020 2:26:02 AM

Average revenue per user in Q3 rose to Rs 128 compared with Rs 127 in the previous quarter.

reliance, reliance jioDuring the December quarter the company added a total of 37.1 million customers.

Reliance Jio on Friday reported a 36.4% sequential increase in net profit to Rs 1,350 crore for the December quarter on the back of strong operational performance and tariff hike. From the third quarter, user inter-connect charge (IUC) have started adding to their earnings as the company is now a net gainer.

While the operating revenues for the December quarter rose 6.4% on quarter to Rs 13,968 crore the operating margins rose 75 basis points to 40.1%. Earnings before interest tax depreciation and amortisation (Ebitda) rose 8.4% on quarter to Rs 5,601 cr.

During the December quarter the company added a total of 37.1 million customers. However, due to IUC the company saw around 22 million subscribers, primarily the heavy voice users leave the platform.

The company sees this as a positive development as the company has become a net gainer on IUC, which happened to be a net cost for the company it paid to other operators. The company charges 6 paise per minute to its customers as IUC charges. Although the company did not share its total IUC cost for the December quarter, it was Rs 652 crore in Q2FY20.

The average revenue per user (ARPU) in December quarter rose to Rs 128 compared with Rs 127 in the previous quarter led by positive IUC impact during the quarter. “We have become net gainer on the IUC charges and it will start to positively impact Rjio margins from the March quarter of 2020,” said Anshuman Thakur, head of strategy, RJio.

On the operational front the company’s strong performance continued in the December quarter with total data traffic increasing to 1,208 crore GB compared with 1202 crore GB in the September quarter. Average usage per customer however fell to 11.2 GB compared with 11.70 GB in previous quarter.

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