Reliance Jio’s net loss widens to Rs 22.50 crore for Oct-March

Mukesh Ambani-owned Reliance Jio Infocom Monday said it has posted a net loss of Rs 22.50 crore for the six months ended March 31, wider from a year ago when it was at Rs 7.46 crore.

Announcing its numbers for the first time ever, the new mobile phone operator said its total income fell by 75% to Rs 0.54 crore, compared to Rs 2.25 crore in the same period last year. The firm’s debt to equity ratio stood at 0.67.

Total expenses for the six months stood at Rs 34.88 crore compared with Rs 13.63 year ago. Jio’s loss before tax stood at Rs 34.34 compared with a loss of Rs 11.38 crore when compared during the same period last year.

Jio, which had notched up more than 100 million followers within 120 days of its launch on September 5, thanks to its free offers, had said at March end that 72 million of these had opted for its paid plans. At the same time, the company has been spending top dollars – over Rs2 lakh crore – to expand and deepen its 4G network across the country.

The telco’s entry has led to a brutal price war and combined with the need to invest in networks has left the industry debt levels soaring and forced smaller and larger operators to consolidate among themselves to better take on competition.

Over the last three years the government has raised around $35bn (Rs 22.4 lakh crore) from spectrum auctions which compares to the sector revenue-base of $29bn (Rs 18.6 lakh crore). The combined impact of auctions and lower profitability has led to a significant increase in indebtedness for the players. The telecom sector today has a debt upwards of a mammoth Rs 4.89 lakh crore.