GROSS ADDITION OF 24 MILLION SUBSCRIBERS IN 4QFY20; CHURN AT SUB-1%
ENGAGEMENT LEVELS SHOW A SIGNIFICANT INCREASEDURING THE LOCKDOWN WITH NO DROP IN NETWORK PERFROMANCE
STRONG FINANCIALPERFORMANCE WITH IMPROVEMENT IN EBITDA MARGINS; EBITDA GROWTH OF 43% YOY TO ₹ 6,201 CRORES
JIO PLATFORMSLIMITED SIGNS STRATEGICPARTNERSHIP WITH FACEBOOK FACEBOOK TO INFUSE ₹ 43,574 CRORESFOR 9.99% EQUITYSTAKE
JIO PLATFORMSTO LAUNCH A NATIONWIDE VIDEOPLATFORM CALLED JIOMEET HIGHLIGHTS OF QUARTER’S (Q4 – FY 2019-20) PERFORMANCE
Ø Standalone revenue from operations, including access revenues, of ₹ 14,835 crore
Ø Standalone EBITDA of ₹ 6,201 crore and EBITDA margin of 41.8%
Ø Standalone Net Profit of ₹ 2,331 crore; exceptional item (income) during the quarterof ₹ 31 crore related to reversal of provision on AGR dues
Ø Subscriber base as on 31st March 2020 of 387.5 million (26.3% YoY growth)
Ø ARPU during the quarter of ₹ 130.6 per subscriber per month
Ø Total wireless data traffic during the quarter of 1,284 crore GB (34.3% YoY growth)
Ø Total voice traffic during the quarter of 87,634 crore minutes (21.0% YoY growth)
Commenting on the results, Shri Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limitedsaid: “We are glad that we have made connectivity and operations easier for our customers in these difficult times. Every Jio employee is trained to think Customer First and that has resulted in overwhelming customer response as we are serving close to 40 crore Indians now. Jio continues to lead the digital revolution in India and the whole-hearted acceptance of our services motivates us to keep improving every day.
Jio is embarking on the next leg of growth with a path-defining partnership with one of the world’s largest digital companies, Facebook. We are together determined to make India a truly digital society with best-in-class connectivity network complemented with disruptive digital technology platforms for entertainment, commerce, communication, finance,education and healthharnessing world’s best tech capabilities. Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector.”.
Jio Platforms Limited signs strategic partnership with Facebook
§ Reliance Industries Limited, Jio Platforms Limited and Facebook, Inc. on 22nd April 2020 announced the signing of binding agreements for an investment of ₹ 43,574 crore by Facebook into Jio Platforms. Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis.
§ Of the total investment, ₹ 14,976 crore will be retained at Jio Platforms to drive future growth. RIL will redeem OCPS worth ₹ 28,598 crore.
§ This transaction values Jio Platforms Ltd at post money equity value of ₹ 436,172 crore. This would place JPL amongst the top 5 listed companies in India by market capitalisation within just three and half years of launch of commercial services.
§ The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India.
§ This investment would enable new opportunities for businesses of all sizes, but especially for small businesses across India and create new and exciting digital ecosystems that will empower, enrich and uplift the lives of all 1.3 billionIndians.
§ Concurrent with the investment, Jio Platforms, Reliance Retail Limited (“Reliance Retail”) and WhatsApp have also entered into a commercial partnership agreement to further accelerate Reliance Retail’s New Commerce business. JioMart would be integrated with WhatsApp to ensure that consumers are able to access the nearest kiranas who can provide productsand services to their homesby transacting seamlessly with JioMart using WhatsApp.
Jio remains committed to help India fight with Covid-19 through technology
§ During these tough times of Covid-19, Jio’s world-class broadband connectivity solutions along with Microsoft’s collaboration platforms have enabledWork From Home, Learn From Home & Health At Home for Indians.
§ Jio has tailored its plans across services to ensure continued connectivity for all its subscribers. Jio has offered i) double data & additional offnet minutes to all mobility add- on pack users, ii) double data for all JioFiber users, iii) complimentary 10mbps JioFiber plan, iv) extended validity of JioPhone users for free incoming calls and provided 100 minutes call & 100 SMS to JioPhone users who have not been able to recharge, and
v) innovative channels of recharge like ATM, SMS/ Call, peer to peer recharges.
§ Zero impact on Network Operating Centre despite minimum staff due to high degree of virtualization and network automation. Traffic surge has been handled with combination of capacity augmentation and technology.
§ Jio Haptik has powered Government of India’s official helpdesk for Corona Helpline.
§ Aggressive sales initiative and customer focused approach have been launched to help recoup slowdown in subscriber addition momentum, as we return to normalcy. FTTH and Enterprise services remain large greenfield opportunities with demand further reinforced due to Work from Home during the lockdown.
Jio continues to see tremendous demand for data services
§ Subscriber base as of 31st March 2020 was 387.5 million with net addition of 17.5 million during 4QFY20.
§ Strong gross addition of 23.9 million during the quarter and 126.4 million during the previous twelve months with simple tariff plans offering value to allcustomers.
§ After the elimination of excessively heavy voice users during 3QFY20, churn rate has retraced to historical trends and was at 0.57% for 4QFY20.
§ Jio continues to be a net recipient of access charges with outgoing traffic mix within the overall offnet traffic now stable at 48-49%.
§ Customer engagement continues to be robustwith average data consumption per user per month of 11.3 GB and average voice consumption of 771 minutes per user per month.
FTTH and Enterprise Services in early stage of growth
§ The process of converting initial test usersto paid-plans and ramping up sales across 1,600 cities is underway. Average usage across the user base is multi-fold of current industry benchmarks.
§ On the Enterprise side, Jio has signed marquee logos over the past few months and is in the process of provisioning connectivity services using its extensive fibre backbone and access to productivity suites of Microsoft.
§ Focus on the underserved SMB and Micro enterprises market would help Jio gain market share in overall ICT spends of the country.
Largest Distribution and Service Network
§ Reliance Retail is the master distributor for Jio servicesacross mobility and FTTH. Reliance Retail manages a pan-India distribution channel of over 1 million retailers for customer acquisition and selling recharges.
§ MyJio is the best-in-class full service (prepaid and post-paid payments, loyalty coupons, troubleshooting, addition or deletion of services) self-care application. Jio has relatively higher proportion of digital rechargeswhich is reflected in minimal impacton recharge cycle during current situation of lockdown.
§ During the quarter, Jio launched the Jio POS-Lite, creating a completely new pool of entrepreneurs who can serve their micro-communities as Jio channel partners, for recharges and new acquisitions.
Robust Financial Performance
§ Jio has once againdelivered strong double-digit YoY Revenue and EBITDA growth driven by continued subscriber additions and partial impact of tariff hike undertaken in 3QFY20.
§ Quarterly operating revenue increased 26.6% YoY to ₹ 14,835 crore with EBITDA margin of 41.8%.
§ Strong EBITDA growth of 43.2% YoY to ₹ 6,201 crore and lower interest cost drives net profit to ₹ 2,331 crore during the quarter.
§ Net profit increased from ₹ 2,964 crore in FY 19 to ₹ 5,562 crore in FY 20, an annual increase of 88%.
NOTES:
1. The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable. The figures for quarter ended 31st March 2020 are the balancing figuresbetween audited figuresin respect of the full financial year and the published year to date figures upto the nine months of the respective financial years.
2. The Company continues to invest in augmentation of the wireless and wireline network capacity.
3. The Company is mainlyengaged in the business of providing DigitalServices. Accordingly, the Company presently has one Digital Services segment as per the requirements of Ind AS 108 - Operating Segments.
4. The Company during the year has issued and allotted 400 crore 9% Non-Cumulative Optionally Convertible Preference Shares (‘OCPS’)(Series-V) of ₹ 10/- each for cash, at a premiumof ₹ 40 per OCPS aggregating ₹ 20,000 crore to RelianceIndustries Limited (RIL), the Ultimate holding company. Subsequently the OCPS have been transferred by RIL to Jio Platforms Limited, the holding company.
5. The Company during the year has issued and allotted 10,500crore 0.01% Non-Cumulative Optionally Convertible Preference Shares (‘OCPS’) (Series-VI) of ₹ 10/- each for cash, aggregating ₹ 1,05,000 crore to Jio Platforms Limited, the holding company.
6. The Board of Directors of the Company at their meeting held on 25th October 2019 had approved a Scheme of Arrangement (the Scheme) between the Company and certain classes of its creditors including debenture holdersfor transfer of certain identified liabilities (including listed non-convertible debentures) aggregating ₹ 1,04,365 crore to Reliance Industries Limited (RIL) (the Ultimate Holding Company) for an equal amount of consideration.
The Company received the approval for the Scheme on March 13, 2020 from the National Company Law Tribunal, Ahmedabad Bench. The Scheme became effective from March 13, 2020 with Appointed Date being openingof business hours of December16, 2019 and accordingly, the Identified Liabilities of the Company stand transferred to RIL.
7. In view of judgement dated 24th October 2019 of the Honorable Supreme Court of India relating to the Adjusted Gross Revenue (AGR), the Company during the year, has paid liability for the period 2010-11 to 2018-19 towards License fees/Spectrum Usage Charges as Exceptional Item (Net of Tax) of ₹ 146 crore.
8. As per section 115BAA introduced vide Taxation Laws (Amendment) Act 2019, the Company has adopted new income tax rates with consequential impact on the deferred tax including MAT credit recognised in the earlier years.
