Reliance Jio may have 30 million subscribers by fiscal end: report

Mumbai: Reliance Jio Infocomm Ltd, the telecom business of the Mukesh Ambani-led Reliance Industries Ltd (RIL), is expected to have at least 30 million subscribers by end of this financial year with a revenue of over $1 billion, according to a 25 April research report from Morgan Stanley Research.

“We estimate Reliance Jio to have 30 million subscribers by FY2017 and 60 million by FY2018 with an ARPU (average revenue per user) of 1.3x -1.8x vs the current industry ARPURs.200, thus generating over $1 billion revenues in FY2017,” the report said.

The report, authored by analysts Vinay Jaising, Rakesh Sethia and Amruta Pabalkar, said RIL, the energy-to-telecom conglomerate, will launch its fourth-generation (4G) mobile phone services in three to nine months.

Jio, the brand name of Reliance Jio Infocomm, officially launched its services in December 2015 on Reliance Founder’s Day, when it started offering services to around 80,000 employees as a way to test its services. Reliance said that commercial services would be launched this year.

“We are estimating launch in early second half of 2016. RIL indicated that spectrum from (Anil Ambani-led Reliance Communications Ltd) R-Com (850Mhz) will get integrated in coming weeks, setting the stage for a full-scale roll out. Initial results from the test phase (0.56 million users) indicate high data usage (18GB). Jio is expanding test program to include more users which will be upgraded into commercial operations; thus it would already have a couple of million subscribers into the launch,” the report said.

In January, Reliance Jio, signed agreements with R-Com to share spectrum.

Last week, the department of telecommunications (DoT) approved a spectrum-sharing deal between R-Com and Reliance Jio Infocomm for the faster rollout of high-speed 4G services.

R-Com and Reliance Jio will share spectrum with Jio in nine telecom zones—Mumbai, Uttar Pradesh (East), Madhya Pradesh, Bihar, Orissa, Haryana, Himachal Pradesh, Assam and North-east.

Reliance Jio has already spent Rs.1.2 trillion in FY16 for the 4G launch.

While announcing its quarterly earnings on Friday, RIL said that it would spend another Rs.30,000 crore in the current financial year.

“Jio currently has 270,000 Rkm (route kilometre) of fibre, 90,000 towers (of which 50% are owned) and 50,000 small cells. It intends to add another 30,000 RKm of fibre, 10,000 towers, and double the small cells in FY17, which would help it to increase its coverage to reach 90% of the population from 70% currently. Management suggested that capex would eventually decrease to 6 to 8% of sales. We continue to build in capex (capital expenditure) of 15% in the longer term,” the report said.