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Reliance Earnings: Jio completes 5G coverage planning for 1,000 cities, retail arm records all-time high revenue

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Jio has completed 5G coverage planning in 1,000 cities across the country, according to a press release by Reliance. The company also claimed that its retail venture, which oversees its digital commerce platforms, registered a “landmark quarter” as revenue and earnings before interest, taxes, depreciation, and amortisation (EBITDA) is an all-time high (ATH) figure.

“Data driven network planning for Jio’s 5G network is underway based on targeted customer consumption and revenue using heat maps, 3D maps and ray tracing technology for precise coverage planning to target high consumption and high perception locations,” the statement read adding that trials are underway on use cases across healthcare and industrial automation.

The company recorded an increase of 10.2 million subscribers to accrue a total base of 421 million subscribers at the end of December 31, 2021. It must be noted that the company also saw a net reduction of 8.4 million in the customer base on account of SIM consolidation and repurposing of its customer retention efforts.

“This decline is mainly driven by subscribers with inconsistent engagement and lower-end subscribers,” the company reasoned.

The statement wrote that Jio’s data traffic touched 23.4 billion gigabytes in the third quarter, over by nearly 50 percent compared to its previous quarter. The statement disclosed that the average data and voice consumption per user per month increased to 18.4 GB and 901 minutes respectively.

Jio is the largest telecom operator in the country and its financial statement offers a glimpse of the health of the telecom sector. Reliance is also looking to expand to capture a sizeable share of the digital commerce market dominated by Amazon and Flipkart and the statement provides an insight into how the company is doing on that front.

Performance of Reliance’s digital arm

The company announced that its retail venture—Reliance Retail— posted all-time highs for revenue and EBITDA. It explained that the figures were on account of increasing store sales and sustained growth in digital & new commerce segments.

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“Consumer Electronics and Apparel & Footwear doubled their business on the back of strong festive sales while grocery sustained its consistent and strong double-digit growth momentum,” the company stated in its release.

More than 50 per cent of the shoppers in its digital commerce segment hailed from Tier II & below cities, the company declared. Reliance has been investing heavily in this segment such as its investment of $200 million in Dunzo, among several others.

It added 2.3 million sq. ft. of warehousing space to augment its service capabilities. The company claimed it strengthened its digital and new commerce capabilities by registering 4X growth in merchant partners whereas digital commerce orders grew 2X as compared to the third quarter in the last financial year.

  • Consumer Electronics: Its consumer electronics segment posted double-digit growth because of its stores and the digital platform. The company also launched JioMart Digital, the new merchant business for Consumer Electronics which helped it to ramp up merchant onboarding.
  • Fashion & Lifestyle: AJIO recorded its highest-ever revenue in a quarter. The platform said that it saw an uptick across all growth parameters during its festive sales period. AJIO Business recorded 3x growth in revenue. The business grew its catalogue by 2x Y-o-Y.
    • Zivame, its online lingerie store, posted a “record” revenue in the quarter with a focus on catalogue expansion and new store openings. It has 100 stores with nearly one-fourth of the stores opened during the quarter.
    • Urban Ladder, its online furniture platform, doubled its business over the last year.
  • Grocery: Reliance has been making steady inroads into the grocery business which delivered double-digit growth. JioMart Kirana “recorded new highs with aggressive merchant partner onboarding in existing and new markets”, the release noted. It is now present in 62 cities.
    • It reported that daily orders on Milkbasket grew by 1.5x as the platform looks to expand operations to new areas.
    • Reliance’s pharma platform, NetMeds, scaled its hyperlocal fulfilment through the addition of more stores and operationalized additional fulfilment centres.

“The last quarter was marked by an operating environment at par with pre COVID levels and was well received by positive consumer sentiments,” the company said.

The company posted an EBITDA of Rs. 3,822 crore, up 23.8 per cent year-on-year whereas the net profit for the quarter stood at Rs. 2,259 crore.

Jio’s financial highlights

  • Jio Platforms Ltd. registered a net profit of Rs. 3,795 crore in the third quarter of the financial year 2021-22, a growth of nearly nine percent Y-o-Y.
  • The consolidated statement revealed that Jio’s average revenue per user (ARPU) was Rs. 151.6 per month, adding that the financials will see the “full impact of tariff hike over the next few quarters”.
  • Jio’s gross revenue for the quarter was Rs. 24,176 crore as compared to Rs. 22,858 crore in the third quarter of FY 2020-21. The release explained that the company’s EBITDA crossed the Rs. 10,000-crore mark for the first time, at Rs. 10,008 crore.

Reliance’s media financial highlights

  • The company said that its revenue from its media businesses rose 16.5 per cent Y-o-Y to Rs. 1,657 crore, driven by ad revenues in both news and entertainment businesses.
  • Its media arm’s EBITDA for 3Q FY22 grew 15.1 per cent Y-o-Y to Rs. 373 crore as the profitability of news business— TV and Digital saw an improvement.
  • Voot Select registered growth in its paid subscriber base during the quarter. The company said that it was starting to stream major football leagues, and added NBA to its portfolio.

“Network18’s digital news business delivered another quarter of strong performance,” according to the company but it noted that the subscription revenue from TV saw a marginal decline due to a drop in international revenue while domestic subscription continued to be stable.

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I cover several beats such as crypto, telecom, and OTT at MediaNama. I will be loitering at my local theatre and consuming movies by the dozen when I am off work.

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