What Akash Ambani said on Jio tariff hikes ahead of record IPO launch

Akash Ambani has indicated that Reliance Jio has room to increase mobile tariffs but would prefer to drive revenue growth by offering more digital services to customers, as Mukesh Ambani's telecom and technology business prepares to launch India's biggest-ever IPO next week.

Speaking at a media interaction ahead of the Rs 30,213 crore Jio Platforms IPO, Ambani said the company has several ways to increase revenue beyond charging customers more for mobile data. His comments come amid expectations of further tariff increases in India's telecom sector, where operators have been looking to improve average revenue per user (ARPU) and profitability.

"We always have the ability to take prices up, but what we want to do is to really deliver more services to our customers so that they're very happy, rather than just pricing per GB as a lever that we want to control," Ambani said.


The remarks suggest that Jio intends to maintain its focus on affordable connectivity while seeking additional revenue from home broadband, enterprise solutions and digital services. The company has built its subscriber base through competitive pricing since its commercial launch in 2016 and now serves more than 530 million customers.

Also Read: Jio IPO: Akash Ambani says Rs 30,213 crore issue will push company towards net debt-free status

Ambani said the company's immediate priority was to give subscribers more services and charge for the additional value they receive.

"We have the most affordable plans in India, and we have the price lever that we can always play. But our first endeavour is to deliver more services to our users and extract value that our competitors have left," he said.

Tariff hikes only one of several growth levers

Tariff increases remain an important earnings driver for Indian telecom operators. Jio's mobile ARPU of around Rs 216 remains below Bharti Airtel's Rs 264, leaving room for improvement through higher tariffs, premium plans and greater customer spending.

However, Ambani said Jio sees substantial opportunities to expand revenue across its existing businesses without relying primarily on tariff revisions.

"The capability Jio built are the decadal growth opportunities," he said, pointing to mobility, home broadband and enterprise services. "Tariff is just one of the levers. But there are enough other levers available to create more value for the consumer," Ambani added.

Jio expects growth in its mobile, home, enterprise and digital services businesses to support higher revenue in the coming years. The company is also looking to improve profitability through greater use of technology and operating efficiencies.

Ambani said Jio's EBITDA margin had improved from about 50% to 53% over the past three years, with further expansion possible as new services are introduced.

"We think there are more services that we can launch that sit outside the licensed services, which will ensure our EBITDA margins improve from the present," he said.

Pankaj Pawar, a senior Jio executive, said the company's investment in network infrastructure had created opportunities to earn more revenue from existing customers as additional services become available.

Jio targets 100 million homes

Home broadband is emerging as another important part of Jio's growth strategy. Ambani said the company's proprietary technology operating on unlicensed spectrum had expanded the addressable market for home connectivity from 40 million households to 100 million.

The technology, known as UBR, allows Jio to connect homes wirelessly without requiring conventional last-mile fibre infrastructure in every location.

Ambani said the network equipment rollout had already been completed, allowing Jio to provide home broadband connectivity within 48 hours of receiving a customer request. The company is also looking to take its technology beyond India through partnerships with overseas telecom operators.

Ambani said Jio would prefer to offer its end-to-end technology stack to local partners rather than enter international markets directly as a telecom operator.

He said the strategy could help Jio become a managed technology services partner in both developed and developing markets.

Jio Platforms has fixed a price band of Rs 1,065-1,119 per share for its IPO, which will open for subscription on October 21 and close on October 23. Anchor investor bidding is scheduled for October 19, while the shares are expected to list on October 28.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.