Reliance Industries may declare Jio results separately from Q2

MUMBAI: Mukesh Ambani owned Reliance Industries (RIL) is likely to formally declare separate results for Reliance Jio Infocomm (Jio) only from the July-September quarter and not the quarter to June.

"The board will take the final call but that’s the thought process. The company wants the business to settle down and then report numbers separately," said a person familiar with the matter. "There is no statutory requirement for RIL."

Jio’s net loss for the six months ended March widened to Rs 22.50 crore from Rs 7.46 crore a year earlier, according to the first set of financial numbers that the Mukesh Ambani-owned telco reported in April since starting services. This results were aimed at bond holders.

The company did not respond to query sent by ET on the same. Meanwhile, Jio is again in the customer acquisition mode, from conversion to paid service, the person said.



This comes as the new telco, after a flying start last September with consecutive free promotional offers that saw the telco notch up more than 100 million users within 170 days, has seen its subscriber addition pace dip in recent months.

A report by Goldman Sachs Equity Research report said Jio added 0.4 million active subscribers in April, its fourth straight month of deceleration. ‘With Jio starting to charge from April, we believe deceleration in subscriber additions is likely to continue,’ it said. In April, Bharti Airtel added more active subscribers (2.6 million) than the new entrant, according to the report.

Active subscriber is taken according to visitor location register (VLR) , which is a key metric indicating the number of subscribers actively using mobile services. "That even the customers who have taken a Jio SIM continue to use the incumbent networks does indicate that there is some inherent (perhaps legacy, perhaps coverage) value that the customers continue to see in incumbent networks," noted a report from Kotak Institutional Securities.

The person blamed the slowdown due to the limited availability of 4G handsets. "But Jio is still getting a majority share of the incremental 4G smartphone shipments," the person said. Jio has 112.55 million subscribers as of April 2017.

According to the Goldman Sachs report, India had about 150 million 4G smartphones as of March 2017 with 7-10 million new 4G smartphones getting added every month. Jio garners 50% market share of 4G smartphone user base.

"We believe Jio is likely to make its next big push on subscriber additions when it launches a 4G feature phone to target mid-level to low-end of industry subscriber base, but until then subscriber additions are likely to remain subdued," said analysts of Goldman Sachs in their report. Kotak too stated that it saw the "slowdown as natural noting 4G device base limitations that Jio has to contend with".

The telecom operator has been in the news for keeping its VoLTE feature phone in the wings and this is expected to be the next game changer for the company. This is crucial because it is feature phones with their low price points that will help the telco get subscribers who cannot afford a smartphone.

According to Counterpoint Research, India as of now has an installed base of 700 million handsets of which 400 million are feature phones. According to Tarun Pathak, associate director at Counterpoint Research, "the market is in need of a VoLTE feature phone and right now Jio is closest to introducing one."

The Mukesh Ambani-owned firm’s launch in September sparked price wars in a sector reeling under a debt of nearly Rs 5 crore — over Rs 7 lakh crore by banking estimates — and forced top players like Vodafone India and Idea Cellular to announce a merger.

The telco offered all its services free till March 31under two successive promotional offers. It started charging subscribers at sharply discounted rates from April 1, while voice calls on the network remain free for life.