Reliance Jio Might Increase Prices Of Prepaid Plans Soon: Know Why

Even though Reliance Jio has no plans to increase its tariffs, analysts believe that the telco should raise the prices of its prepaid plans. This update comes after Jio platforms posted a net profit of Rs. 3,508 crores in the Q4 FY21.

Besides, the company added 15.2 million customers during the quarter, which is again lower than 25 million before the tariff hike, which was introduced in December 2019. However, the ARPU has decreased to Rs. 138 from Rs. 151 in the third quarter of the last financial year.

Analysts' Views On Reliance Jio Q4 Result

This comes even after Reliance Jio launched new plans for JioPhone. "This quarter saw the churn declined to around 15 million, which is likely a result of new plans launched for JioPhone. However, this definitely affects the quality of the subscriber base," analysts from Ambit Capital said.

Another financial firm called Dolat Capital said this is one of the slowest quarter of the company. The firm states that the APRU of Reliance Jio is quite low as the telco was expected to garner Rs. 142 in the last quarter. Similarly, ICICI Securities said that Reliance Jio missed several things on the revenue front ever since the company starts reporting its results.

"In case of low revenue growth as in Q4FY21, we see Reliance Jio running a risk of significant earnings decline in FY22. We believe the company will also need tariff hikes to maintain earnings growth momentum, which we have built-in for H2FY22E," ICICI Securities said.

Reliance Jio Future Plans

Notably, Reliance Jio is planning to bring affordable smartphones and laptops to India at the annual general meeting. These products are expected to attract more users to its platform. However, analysts at Credit Suisse said that Airtel is likely to launch a bundle offer with leading smartphone brands. The firm added that Vodafone-Idea is not in a position to bring smartphones due to its weak balance sheet.

Overall, the fourth-quarter result of Reliance Jio can force the telecom operator to increase tariffs. This might help the company to increase its average revenue per user in the coming days or quarters.