Reliance Jio ramps up AirFiber for faster 5G monetisation before 2025 IPO

Reliance Jio targets one million monthly AirFiber additions to boost 5G monetisation, with ARPU growth and subscriber expansion driving momentum ahead of a potential late-2025 IPO

Reliance Jio is ramping up its 5G-based fixed wireless access (FWA) business, Jio AirFiber, by significantly increasing customer additions over the next year. This strategy is aimed at driving 5G monetisation as the company prepares for a potential initial public offering (IPO) by the end of 2025, according to a report by The Economic Times.

 

Jio aims to onboard one million AirFiber customers within 30 days, leveraging increased data consumption and subscriber growth to fuel excitement around its IPO. Brokerage firm CLSA noted in a research report that these efforts are likely to enhance the valuation of Jio ahead of the proposed listing, the news report said.

 

 

To meet its aggressive targets, Jio has expanded its distribution network and streamlined its AirFiber onboarding process, enabling the connection of over one million homes monthly. As of September 2024, the company had over 2.8 million AirFiber users and is estimated to have added another 1.9 million broadband customers in the December quarter, based on analyst projections, as mentioned by The Economic Times.

Higher revenue potential from AirFiber

Jio’s FWA business offers significantly higher revenue potential compared to its mobile services. The average revenue per user (ARPU) for AirFiber is approximately Rs 650-700 per month — more than three times the Rs 195 mobile ARPU recorded in Q2FY25, the news report mentioned. This makes AirFiber a critical driver of 5G monetisation, which has faced delays despite Jio’s $25 billion investment in 5G spectrum and infrastructure.

 

To kickstart 5G monetisation, Jio raised the minimum plan threshold for its 5G mobile broadband service in July 2024, requiring users to upgrade to higher-value plans. However, analysts suggest that the expansion of AirFiber’s high-ARPU user base is expected to accelerate monetisation efforts, especially as the full impact of recent mobile tariff hikes will only materialise in the Q4FY25 and Q1FY26 quarters.

Positive outlook for ARPU growth

Faster monetisation of 5G services is expected to boost Jio’s ARPU in the coming months, strengthening its financial metrics and making it more appealing to investors ahead of its potential IPO. Global brokerage CLSA predicts that Jio’s operating income (Ebitda) will grow by 40 per cent to Rs 87,600 crore by FY27, driven by ARPU growth and subscriber additions. By FY27, Jio’s ARPU is expected to reach Rs 230, up from Rs 195 in Q2FY25, The Economic Times mentioned.

Anticipated IPO: India’s largest

Sanford C Bernstein has valued Jio Platforms Ltd (JPL), which includes Reliance’s telecom and digital businesses, at $98 billion. Based on this valuation, Jio’s IPO could be the largest in India’s history, potentially raising around Rs 42,100 crore. Current regulations require companies with a valuation of Rs 1 trillion or more to sell at least a 5 per cent stake in their IPO.

 

The largest IPO in India to date has been Hyundai India’s Rs 27,856 crore offering in 2023. Reliance Industries, led by Mukesh Ambani, currently holds a 66.5 per cent stake in JPL. The remaining 33.5 per cent is divided among strategic investors like Meta and Google (17.7 per cent) and global private equity firms (16 per cent). JPL had raised over Rs 1.52 trillion from these investors in 2020.

 

Bernstein forecasts that Jio will achieve a compound annual revenue growth rate of 17 per cent over the next three years, driven by 14 per cent ARPU growth in FY26. The brokerage also expects Jio’s market share to increase, capturing 48 per cent of industry revenue by FY26, the report said.