Reliance Jio, which Mukesh Ambani once called the world's largest startup, reported a second profitable quarter, aided by strong customer additions, even as average revenue per user came down.
In the quarter ended March, Jio's net profit rose 1 per cent to Rs 510 crore, versus Rs 504 crore in October-December.
The telecom operator reported operating revenue of Rs 7,128 crore, up 4 per cent quarter-on-quarter.
In the first full year of its commercial operations, it delivered a profit of Rs 723 crore on operating revenue of Rs 20,154 crore.
"The strong financial results of Jio in a competitive market environment demonstrates the robustness of the Jio business model and ability to offer most value to our customers and partners," said Mukesh Ambani, RIL chairman.
Even as quarterly revenue rose, the average revenue per user (ARPU) declined to Rs 137.10 per month from Rs 154 last quarter, due to the tariff cuts announced in January. To an extent it was offset by net addition of 26.5 million subscribers.
As of March 31, Reliance Jio had 186.6 million subscribers.
"ARPU came down, which was primarily due to the price action that happened earlier in the quarter. Tariffs were reduced by other operators and we responded by reducing our tariff, almost a Rs 50 reduction in plans. We have been able to make up for it due to subscriber additions," said Anshuman Thakur, head of strategy at Jio.
Jio's earnings have come under close scrutiny in the past, but officials maintain that the earnings are calculated as per Indian accounting standards (Ind AS).
Officials say that the Jio network has already reached 99 per cent of the population. The next big thing for the company could be the rollout of its FTTH (fiber to home) broadband and enterprise services.
"The capacity is now fully available for us to bring fibre into homes and enterprises. That's the next big opportunity. We are very close to homes and enterprises, anywhere between 20 metres to 200 metres across vast majority of households," said V. Srikanth, joint CFO of RIL.
The company has been test marketing it in a few areas and it may not have a national commercial launch like Jio's 4G services, instead launching it area-wise. Company officials are not putting any date to it, just yet.