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Richest Indian says his mobile-phone unit is making profit

Bloomberg logoBloomberg 17-10-2017 Siddharth Philip

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, speaks during a convocation at the Pandit Deendayal Petroleum University in Gujarat. © Amit Dave/ Reuters Mukesh Ambani, Chairman and Managing Director of Reliance Industries, speaks during a convocation at the Pandit Deendayal Petroleum University in Gujarat. (Bloomberg) -- Billionaire Mukesh Ambani, who upended India’s mobile-phone market with free data and voice services a year ago, said the business made profit before interest and taxes as the unit began charging for data even as it reported a net loss.

Reliance Jio Infocomm Ltd. had a 2.6 billion rupee ($40 million) profit before interest and taxes, the company said in a statement on Friday. It’s the first time Ambani, India’s richest man, has disclosed earnings for the business. The company reported a net loss of 2.71 billion rupees on revenue of 61.5 billion rupees.

Despite being the newest entrant in what was already one of the world’s most crowded mobile-phone markets, Jio has accumulated more than 138.6 million subscribers and has triggered a shakeout in the industry by undercutting prices. That’s prompted existing carriers to slash their tariffs and pursue mergers to survive.

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Industry leader Bharti Airtel Ltd. said this week it would buy Tata Group’s mobile-phone business, months after agreeing to acquire Telenor ASA’s local operations. Vodafone Group Plc and Idea Cellular Ltd. are in the process of merging their Indian operations to create the nation’s largest carrier. Reliance Communications Ltd. had planned to merge with Aircel Ltd., but that deal fell apart in early October.

Shares of oil refiner Reliance Industries Ltd., which controls Reliance Jio Infocomm Ltd., rose 0.4 percent to 876.45 rupees at the close of trading in Mumbai.

Jio, which already ranks fourth locally in terms of mobile subscribers, is planning further market share gains. The company is offering a $23 mobile that offers 4G data plans that cost as low as 23 rupees for two days or 153 rupees monthly.

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