India challenger brand Reliance Jio was tipped to have recorded its first quarterly net profit in the final calendar quarter of 2017, some 15 months after its launch.
Sources told Bloomberg the operator was on course to move into the black during the quarter (Jio’s fiscal Q3), due to factors including a reduction in interconnection fees decreed by the Telecom Regulatory Authority of India in September.
Jio previously booked an operating profit for its fiscal Q2 (the three months to end-September), but a net loss of INR2.71 billion ($43 million).
The operator did not comment on the report or reveal guidance on its quarterly performance, which it is expected to reveal later this month. However, in December Mukesh Ambani, chairman and MD of the operator’s parent company Reliance Industries (pictured), said Jio was “ahead of schedule” on its returns.
Reliance Jio sparked a price war in India when it launched in September 2016 offering free and discounted services in an attempt to rapidly build its customer base.
Its entry into the market and pricing policies are estimated by Bharti Airtel chairman Sunil Bharti Mittal to have cost operators between $40 billion and $50 billion in written-off assets. Vodafone Group CEO Vittorio Colao had also warned the decision to cut termination fees would benefit Jio to the detriment of India’s larger operators.
Since Jio’s launch the Indian market went through a period of extensive change with a rapid growth in 4G subscriptions and planned operator consolidation.
Current market leader Bharti Airtel reported six consecutive quarters of falling profits, while second and third largest players – Vodafone India and Idea Cellular – are in the process of merging, and Reliance Communications recently sold infrastructure assets to Jio as it makes an exit from the consumer wireless sector.