Reliance Jio, India’s number one telecom operator might report significant average revenue per user (ARPU) gains in the coming months. ARPU figure has become a focal point for the telecom industry. Because of the cutthroat competition and low tariffs, all the telcos had to suffer through the problem of low ARPU. Neither had any option but to keep offering lower tariffs to ensure that they have enough subscriber market share to sustain. But this hurt their revenues and the overall capacity to grow.
Reliance Jio ARPU Gain Has been Delayed
Note that Jio has been clearing its inactive user base for a few months since tariff hikes. The telco has been able to improve its VLR subscriber percentage very aggressively in a short span. This will also reflect positively on the ARPU of the telco for the last quarter of FY22. Further, it is worth remembering that Reliance Jio has a lot of subscribers on the long-term plans. This means that many would have subscribed to the higher tariff plans in the March quarter for the first time. This means that the ARPU gain for Jio should be substantial. The way Reliance Jio is clearing its inactive subscriber base, it won’t be long when its VLR subscriber percentage would come very close to that of Bharti Airtel. Reliance Jio’s overall subscriber base dipped by 3.66 million in February 2022 while its active user base grew by 10 million users. Note that here we are talking about the wireless subscribers. Jio’s overall subscriber base currently stands at 402.73 million. The telco has high aspirations of reaching the 500 million user milestone. It will take a lot of time for the telco to reach there as the quality of service is almost the same as provided by Airtel and the tariffs aren’t very much different either. The growth of the active user base by 10 million in the short month of February is a good thing for the telco. It shows the consumer confidence in the company.
