When Reliance Industries announced its fourth quarter results, the focus was really on the telecom sector. After all, the refining and the petchem sectors had managed to stabilize their margins and the GRMs continue to enjoy a spread over the Singapore benchmark. The big story was always going to about Reliance Jio only…

Profits almost static…

The standalone net profit for Reliance Jio at Rs.510 crore was almost flat even as the operating profits were up by just 3.6% on a QOQ basis. The operating margins at 37.8% had narrowed by nearly 110 basis points. That was quite understandable. If you look at the Average Revenue per User (ARPU) chart above, Reliance Jio has shown a clear fall in ARPUs. That is because lower prices and competitive positioning has taken its toll on RIL. Of course, Bharti ARPUs have actually fallen faster.

Initial thrust is over

One message that comes from the Jio quarterly results is that the initial boost to market share may be over. Jio’s market share grew from 0 to 15.5% in 18 months flat. With just 3 major players left in the entire telecom industry, the incremental gains may be limited from here on. That is the key

Big story from here on…

 Even as RIL approaches a market cap of $100 billion, the bigger question is what the future outlook for Jio is. It has already created the required dent in the data and voice market. That will now be marginal. The focus will now shift on how Reliance manages to merge content, community and data for a unique client experience. Jio was always supposed to disrupt the digital space. Now is the time for Jio to layout its grand game plan for 2020!