Jio Platform Valuation To Jump To $110 Billion By FY22
The Jio Platforms (JPL) that are a part of the parent company
Reliance Jio Infocomm can jump from their current valuation of $66 billion to
$110 billion, which is a staggering jump of 66%. The growth will be driven by a
sharp rise in the ARPU (Avg. Revenue Per User) in its mobile business, which
will be coupled with strong revenue contributions from the Jio Fiber broadband
service, along with the digital ad/subscriptions business and enterprise
business in the next 2 years.
A key performance metric is ARPU which helps
analyse the success of a telco. BofA estimates that the current Avg. Revenue
Per User (ARPU) of the Jio Platforms is INR 131 which is expected to rise to
INR 200 by FY22 which is a rise of 53%. The increase in the average revenue
when coupled with the other offerings from the company like broadband
/enterprise offerings along with the Jio apps also gaining scale will
collectively boost JPL’s valuation to an estimated $110 billion. The Jio IPO
could also be a catalyst for Reliance Industries Ltd.
BofA also added that the ARPU of the company
is expected to reach the level of INR 250 and then stabilise. This is because
ad and app subscription business are expected to garner incremental revenues
for the Indian telecom market leader. In the Indian telco market where the
business is dominated by 3 players in the country, Jio’s market share is
expected to inch to 45% by FY22.
The US brokerage firm BofA is expected to have
a user base of 538 million for their mobile business and a user base of 25 million
and 11 million for home broadband and enterprise customers respectively by
FY22. It is by then that all the 3 businesses are expected to generate Ebitda
margins, which will trigger the sharp growth.
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