New account method helps Jio stay profitable despite ARPU fall

KOLKATA: The adoption of a new accounting standard for its lease of assets, coupled with a combination of lower interconnect and employee costs helped Reliance Jio report higher-than-expected profits in the fiscal first quarter, despite a higher-than-expected fall in its average revenue per user (ARPU), analysts said.

They added that the slowing sales of the 4G feature phone, JioPhone, difficulty in cracking the post-paid market, and Brookfield’s over Rs 25,000-crore investment in the tower asset are likely to prompt Jio to stick to low prices for the next few months, which would in turn may lead to Vodafone Idea ceding further revenue market share (RMS) and Bharti AirtelNSE -0.40 % capitalising on it.