Reliance Jio’s average revenue per user (Arpu) is expected to cross the Rs 200 mark for the first time during the October-December quarter, on the back of industry-wide tariff hikes and accelerated adoption of fixed wireless access (FWA) services.
Analysts expect Jio’s Arpu to range between Rs 203 and Rs 206, representing a sequential growth of 4%-6%.
“We expect continued benefit of tariff hike in Q3FY25, though at a lower level than in the previous quarter. The trend of drop in subscriber base from the initial sticker shock of tariff hikes also appears to have waned,” Axis Capital noted in its report.
Jio’s Arpu growth in Q3 follows significant progress in Q2FY25, when it rose to Rs 195 after four consecutive quarters at Rs 182. The July 2024 tariff hikes of 15%-17%, implemented by all private telecom operators, catalysed this growth while also triggering an industry-wide phase of SIM consolidation. Analysts maintain that the full impact of these hikes will only become evident by Q4FY25 or Q2FY26.
Jio’s growth in Arpu is further fuelled by the rapid adoption of its fixed wireless access (FWA) services, such as JioAirFiber. FWA Arpu currently ranges between Rs 650-Rs 700, significantly higher than the sub-Rs 200 Arpu of mobile services, offering a substantial boost to overall averages. By September 2024, Jio’s FWA user base had reached 2.8 million homes, with the company targeting an addition of 1 million homes monthly through its FWA and fiber connectivity offerings. In Q2FY25 alone, Jio added 1.8 million homes.
“Jio’s overall revenue growth of 4% is likely to be aided by brisk FWA subscriber additions,” analysts at IIFL Capital observed. This aligns with blended revenue estimates for Q3FY25, which project revenues at Rs 29,442 crore and Ebitda at Rs 15,745.2 crore, reflecting a 3%-4% growth.
While Arpu growth remains robust, analysts highlight headwinds in subscriber base trends due to continued SIM consolidation following the tariff hikes. JM Financial estimates an overall subscriber loss of 1.5 million in Q3, moderating from the 10 million loss recorded in Q2FY25. October 2024 data from the Telecom Regulatory Authority of India (Trai) also indicated a net loss of 3.8 million wireless subscribers, offset partly by an addition of 0.63 million fixed broadband (FTTH) users.
Notably, Jio’s active subscriber base increased in October 2024 compared to the preceding three months, signalling churn primarily at the lower end of the user base. Analysts view this as a positive indicator for Arpu growth, with higher-value users driving the metric upward.
