Jio's healthy earnings show telecom industry digesting impact of tariff hikes

New Delhi, May 9

Reliance Jio's healthy Q4 results shows the industry is digesting the impact of tariff hikes in the form of meaningful increase in its average revenue per user, said multinational investment bank UBS.

In December 2021, 20-25 per cent tariff hike was taken by Airtel, Vodafone Idea, and Reliance Jio.

Jio's Q4FY22 revenues were up 8 per cent quarter on quarter and 20.4 per cent year on year, aided by 20 per cent tariff hikes, effective from December, and improving customer mix.

While Jio lost 10.8 million subscribers in Q4 (on top of 8.5 million lost in Q3), ARPUs were up 10.6 per cent quarter on quarter and reached Rs 167.6.

The telecom operator's EBITDA grew 10.5 per cent QoQ and 26.8 per cent YoY with margins up 110 basis points QoQ from 49.2 per cent to 50.3 per cent. Net income increased 15.4 per cent QoQ to Rs 41.7 billion.

"Management indicated that performance of the FTTH segment remains strong, with JioFiber reaching c5mn subs as of Q4. Management also touched upon the new content add-on packs introduced for postpaid plans and mentioned that the enterprise business is also showing steady growth," UBS said.

Besides, the investment bank expects telecom operators such as Bharti Airtel and Vodafone Idea to report strong results.

"We have a 'buy' rating on Bharti and a 'neutral' rating on Reliance and Vodafone Idea," it added.