Today a statement by Reliance proclaimed that ‘Jio, which with 160.1 million subscribers is the world’s largest and fastest growing mobile data network, turned positive “in only the second quarter of commercial operations”, logging a net profit of Rs 504 crore’
This indeed a matter of pride for Reliance Industries, which had put a rather heavy investment to power its extremely aggressive strategy to take Indian telecom market by storm. In its first quarter of operations the telecom had ended up with a loss of Rs 271 crore.
Jio’s aggression has also been blamed for erosion of profits in all the incumbents of Telecom sector. Airtel’s third-quarter net profit has plunged 39% Y-o-Y. While market finds JIO to be th reason behind the fall, the decrease in IUC hurt gross revenue by Rs 1,061.5 crore, and mobile ARPU by Rs 16, was stated by Airtel as the reason.
Idea too is expected to follow Airtel in losses as IUC cuts would have had big impact on it operations too.
However in its true to root form Reliance seem to have found a profitable business model once again. Jio’s strong financial result reflects the fundamental strength of the business, significant efficiencies and right strategic initiatives,” Mukesh Ambani said.