Reliance Jio has become the world's largest mobile company, surpassing China Mobile, with this new record - Times of India

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Reliance Jio

, India's leading telecom operator, has surpassed

China Mobile

to become the world's largest consumer of mobile data traffic. Jio's network handled a massive 40.9 exabytes of data in the first quarter of 2024, compared to China Mobile's 38 exabytes, according to Tefficient, a global analytics firm.

Jio also boasts the world's second-largest 5G subscriber base, with 108 million users.

Notably, over 28% of its total mobile data traffic now comes from 5G users

JioBharat drives Reliance Jio's growth

However, Jio's rapid subscriber growth, driven by its JioBharat value plans and promotional unlimited 5G offers, has impacted its average revenue per user (ARPU). Analysts believe this trend will reverse in the near future when Jio implements tariff hikes, which are expected after India's upcoming general elections in June.

Jio's fixed wireless home broadband service, AirFiber, has also seen strong demand with record-high quarterly connections across 5,900 towns. AirFiber subscribers consume an impressive daily average of 13 gigabytes of data, 30% higher than JioFiber users.

Reliance Jio not able to monetise 5G

Despite Jio's impressive statistics, analysts point out that the company is yet to monetize its 5G services, keeping ARPU stagnant. The addition of low-cost JioBharat users and unlimited 5G plans are cited as reasons for the flat ARPU.

Investment firms like JP Morgan highlight that Jio's free, unmetered 5G plans are driving nearly 30% of network usage but hindering 4G data top-ups. This, in turn, encourages price-sensitive consumers to switch to lower-cost plans.

Jio ended FY24 with a subscriber base of 482 million, with an average monthly data consumption of 28.7 GB per user. However, ARPU remained at Rs 182, unchanged from the beginning of the year.

Rival Airtel boasts of better ARPU

In contrast, Bharti Airtel, Jio's competitor, has a lower average data usage (22.5 GB) and slower subscriber growth but is experiencing a steady rise in revenue. Airtel's ARPU rose from Rs 200 to Rs 211 (estimated) as its user base grew from 339 million to 350 million (estimated) in FY24.

Analysts believe that tariff hikes are crucial for all telecom operators to successfully monetize their 5G investments. They expect price increases in FY25 and possibly again in FY26.

Jio's market share gains and superior 5G network are expected to translate to higher revenue once tariff hikes are implemented. The company's partnerships with smartphone manufacturers, JioBharat phone offerings, and bundled services for businesses are also seen as growth drivers. While Jio's fiber-to-home and enterprise segments currently contribute a smaller portion of revenue, analysts at Goldman Sachs estimate it to be around 7%.