Reliance Jio, India’s fourth largest mobile operator with a 10.5 per cent market share, surprised market watchers by reporting positive earnings before interest and tax (EBIT) for its fiscal Q2 ending 30 September.

The operator, which launched nationwide 4G service in September 2016, said EBIT for the quarter hit INR2.6 billion ($39.8 million), on standalone revenue of INR61.5 billion. It said the growth in turnover was driven by rising ARPU (INR156.40) and a net increase of 15.3 million subscribers in the quarter. It ended September with 138.6 million subs.

Despite its positive pre-tax earnings figures, the operator posted a net loss of INR2.71 billion in its fiscal Q2.

Based on Jio’s subscriber growth and increasing ARPU, analysts expect the company to post a net profit in the next fiscal year, The Economic Times (ET) said.

Its fiscal Q2 ARPU was at about the same level as market leader Bharti Airtel’s data ARPU in India for the April-June quarter (INR156).

However, the surge in Jio’s ARPU, according to brokerage Motilal Oswal, included recharges from the previous quarter as well as subscription revenue from its Prime service, ET reported. Without those, the securities company estimates Jio’s ARPU would have been INR130.

Mukesh Ambani, chairman and MD of Jio’s parent company Reliance Industries (pictured), said in the group’s earnings release: “The world is transforming, turning digital and India is not going to be left behind. India is ready to go digital, move from voice to data, and Jio is creating the foundation of data for the next generation business.”

Jio claims it accounts for more than 80 per cent of the country’s data consumption, with its customers using an average of 9.62GB per month. It said its network will reach 95 per cent population coverage in 2018.