Reliance Jio, India's largest telecom operator, saw an uptick of just Rs 1.2 in ARPU (average revenue per user) figure for an entire financial year. The telecom operator desperately needs a boost in ARPU. This is the reason why it went ahead with an increase in prices of prepaid plans. While Jio has been able to make a lot more money than its competitors, it has only been possible because of the scale at which the company is operating. In comparison, Bharti Airtel is a lot more ahead than Jio in the ARPU department. This is because of two reasons. The first one is that Airtel focuses on premium customers and the second one is that Airtel tries to sell more bundle services along with postpaid connections to customers. Jio is yet to compete with Airtel and Vodafone Idea in the postpaid segment head-to-head.

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It is worth noting here that Jio has not seen an increase in ARPU for the past quarters. This is the reason why it was the first one to go ahead with the price hike.

However, one should not forget that the effect of price hike won't be visible right away. Telecom operators will take at least 2 to 3 quarters to see the effect of the tariff hikes on the ARPU levels. For Airtel, the ARPU is expected to reach near Rs 240 or Rs 250 while for Jio is expected to reach Rs 230 by the end of this financial year.

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Jio doesn't want to compete with Airtel in the ARPU. The telecom is more focused on offering services at an affordable price to a larger scale of customers. That said, Jio still has to show growth in the ARPU because that is a direct indicator of rising revenue levels. It will be important for Jio because the company is going to be listed in the stock markets as a separate entity in the near future. So for investors to see it as a great value company, Jio has to continuously show growth in the ARPU as well as profits.

If you want to check out the quarter 1, FY25 results of Reliance Jio, then check out the link mentioned below.