Reliance Jio is rapidly growing its 5G-based fixed wireless access (FWA) service, Jio AirFiber, with plans to significantly increase customer additions over the next year. According to news reports, this move aims to maximise 5G revenue generation as the company gears up for a potential IPO by the end of 2025.
Jio plans to onboard 1 million AirFiber customers within 30 days, leveraging higher data consumption and subscriber growth. To meet its aggressive goals, Jio has expanded its distribution network and simplified the AirFiber onboarding process, enabling the connection of over 1 million homes monthly. By September 2024, Jio had over 2.8 million AirFiber users and is estimated to have added 1.9 million more broadband customers in the December quarter.
AirFiber generates significantly higher revenue than Jio’s mobile services. Its average revenue per user (ARPU) is ₹650-700 per month, over 3 times the ₹195 mobile ARPU reported in Q2FY25. This makes AirFiber a key driver for Jio’s 5G monetisation, which has faced delays despite a $25 billion investment in 5G infrastructure.
In July 2024, Jio raised its minimum plan threshold for 5G mobile broadband, encouraging users to shift to higher-value plans. Analysts believe expanding AirFiber’s high-ARPU customer base will accelerate monetisation efforts, with the full impact of mobile tariff hikes expected by Q4FY25 and Q1FY26.
Faster 5G monetisation is likely to boost Jio’s ARPU, improving its financial position and investor appeal ahead of the IPO.
Sanford C Bernstein has valued Jio Platforms Ltd (JPL), encompassing Reliance’s telecom and digital businesses, at $98 billion. Based on this valuation, Jio’s IPO could raise around ₹42,100 crore, making it India’s largest ever.
Under current regulations, companies valued at ₹1 trillion or more must sell at least 5% of their stake during an IPO. Reliance Industries, led by Mukesh Ambani, owns a 66.5% stake in JPL, with the remaining 33.5% held by strategic investors like Meta, Google, and private equity firms.
The largest IPO in India so far was Hyundai India’s ₹27,856 crore offering in 2023. Bernstein predicts Jio will achieve a 17% compound annual revenue growth rate over the next 3 years, driven by a 14% ARPU increase in FY26 and a market share rise to 48% of industry revenue.
Jio’s expansion of AirFiber and its focus on higher ARPU customers position it well for a strong IPO, potentially reshaping India’s telecom and digital sectors.
Reliance Industries Limited is a large Indian company based in Mumbai, Maharashtra. It operates in various sectors, including energy, petrochemicals, natural gas, retail, entertainment, telecommunications, media, and textiles.
As of 11:39 AM on January 9, Reliance Industries share price is trading at ₹1,260.15, down by ₹5.35 (0.42%). The stock opened at ₹1,267.00, reached a high of ₹1,269.75, and a low of ₹1,250.00. The market capitalisation is ₹17.05 lakh crore, with a P/E ratio of 25.11 and a dividend yield of 0.40%. Over the past 52 weeks, the stock has reached a high of ₹1,608.80 and a low of ₹1,201.50.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Jan 9, 2025, 11:46 AM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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