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Reliance Q1 Profit Rises 7% YoY, Equifax to Pay c. $700m to Resolve Data Breach Probes, Brookfield to Invest in RIL's Telecom Tower Arm

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jul 20, 2019 12:35 PM 5 min read

Reliance Q1 profit rises 7% YoY to INR 10,104cr. Brookfield to infuse INR25,000cr into RIL's telecom tower arm. Fed hints at a quarter-point rate cut. WhatsApp gears up for a full roll-out of WhatsApp payments in India. Instagram is testing a feature to hide public “Like” count. Video game industry expected to generate $152bn worldwide this year. Equifax to pay c. $700m to resolve data breach probes.


Moving on to the top Business news of the day.



Reliance Q1 profit rises 7% YoY to INR 10,104cr. Jio's average revenue per user (ARPU) has been declining consistently over the past six quarters. Is a tariff hike in the offing? Brookfield to infuse INR25,000cr into RIL's telecom tower arm.


Up and Up: Reliance Industries on Friday reported c. 7% Y-o-Y rise in profit at INR10,104cr in Q1 spurred by robust growth in telecom and retail businesses. 

The company’s overall revenue increased 21.25% to INR1.61L cr in Q1 vs INR1.33L cr last year.  

Telecom unit Jio reported 45.60% rise in profit at INR891cr while sales of retail unit grew 47.5% to INR38,196cr. 

View a detailed breakdown of the Q1 financials here.

Marching Ahead: Reliance Jio has overtaken Bharti Airtel to become the second-largest operator in India according to mobile subscriber base, recently revealed a data by TRAI. 

As of May end, Jio had 322.98 million users while Airtel had 320.38 million. Vodafone Idea continues to lead the list with 387.55 million users.

However, it is important to note here that while its subscriber base is rapidly increasing, Jio’s average revenue per user (ARPU) has declined consistently over the past six quarters. Its ARPU for the June 2019 quarter was at INR122, down from INR126.2 in the March 2019 quarter and INR130 in the December 2018 quarter. It was at its peak of INR154 in the December 2017 quarter.

This essentially means that every incremental user contributes less to the total revenue. This is bound to be worrying for the telecom giant and may push it to increase prices. 

Meanwhile…: Rivals Airtel and Vodafone Idea have started weeding out inactive customers through minimum monthly recharge plans of INR35, launched in November.

In the single largest foreign investment in an Indian infrastructure vehicle till date, Reliance Industrial Investments and Holdings (RIIHL), a wholly-owned subsidiary of Reliance Industries has entered into an agreement with BIF IV Jarvis India, an affiliate of Canada-based Brookfield Asset Management for an investment by Brookfield (along with co-investors) of INR25,215cr in the units proposed to be issued by the Tower Infrastructure Trust.

FYI: RIIHL is the sponsor of the trust, which holds 51% share capital of Reliance Jio lnfratel Private Limited (RJIPL), an entity to which the tower assets undertaking of Reliance Jio were recently transferred.

The proceeds from the investment, if it goes through, will be used to repay certain existing financial liabilities of RJIPL and to acquire the remaining 49% of equity share capital of RJIPL, currently held by RIL.



RBI Governor meets heads of PSBs to discuss monetary policy transmission rates and the revised framework for stressed assets. Fed hints at a quarter-point rate cut. 

The What: Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday met the heads of various PSBs to discuss issues such stressed asset resolution, improving loan recovery efforts, and increase credit and deposit growth.

The meeting included deliberation on monetary policy transmission rates and the revised framework for stressed assets.

The Why: The meeting came shortly after various PSU banks reported fraud by the private companies, including the Bhushan Steel scam.

In Other News: The Federal Reserve has signaled a quarter-percentage point cut in interest rate later this month. 

As per reports, a larger cut is unlikely for against an imminent slowdown in global growth, along with an increase in trade-policy uncertainty and a pullback in inflation.

More on this here



WhatsApp gears up for a full roll-out of WhatsApp payments in India. Aditya Birla Payments Bank shuts down operations in less than 18 months. 

Rock & Roll: Messaging platform WhatsApp is gearing up to launch its payments service WhatsApp payments to over 300 million users in India.

As per a report, the platform has completed the third-party audit process and is preparing to submit the audit report to the RBI. The final roll out will begin after RBI’s approval. 

Previously: WhatsApp rolled out WhatsApp Payments to a select user base of 1 million users in India last February. However, that time the app had run into regulatory hurdles with the RBI which required the company to store all payments related data, including the details of the payments and data collected, on the servers located within the country.

Cut Down in the Prime: A joint venture by Aditya Birla Nuvo and Idea Cellular, Aditya Birla Payments Bank, has announced that it will shut down operations due to unanticipated developments in the business landscape that have made the economic model unviable.

Were you a customer? Read this article to know what you should do now.



Instagram is testing a feature to hide public “Like” count. Video game industry expected to generate $152bn worldwide this year.

Like, or No Like?: Image-sharing platform Instagram is reportedly expanding its test of a feature that hides public “Like” counts. The test that began in Canada in April, has now added Ireland, Italy, Japan, Brazil, Australia, and New Zealand.

As part of the new feature that is currently being tested, “Likes” aren’t shown in any public part of the app, including on public-facing grids or on the main feed. The person who posted an image, however, can still see the “Like” count privately.

The move comes as an attempt by the platform to emphasis on “digital well-being,” which mostly entails reducing screen time and limiting notifications.

The feature would help to “reduce pressure” and help users “focus on the photos and videos they share, not how many likes they get.” 
The Rising Behemonth: As per market researcher Newzoo, the video game industry is a behemoth expected to generate $152bn worldwide this year. That’s 57% more than the $97bn generated by the global theatrical and home-movie market last year, and eight times the $19.1bn generated by the global recorded music market. 

Akin to these industries, video game makers are also grappling with the seemingly boundless potential of streaming, and the race is on to see who gets it right first.

The Battle Royale: Many agree that the major consumer cloud-computing providers – Amazon, Google and Microsoft – will become the heavyweights of the cloud-gaming market. However, there are others who are preparing to part take in this battle royale. Here’s a list of some of them. 



Equifax to pay c. $700m to resolve data breach probes. Cars24 shuts down outlets in Delhi for violating lease agreements, receives legal notices from landlords over dues. 

Equifax is Fined!: As per a WSJ report, credit reporting company Equifax is close to a deal to pay c. $700m to settle data breach probes with US regulators and states, including Federal Trade Commission, the Consumer Financial Protection Bureau and most state attorneys general. 
The 2017 data breach at the company had exposed nearly 150 million Americans’ Social Security numbers and other sensitive personal information.
Gurugram-based online used car marketplace Cars24 has reportedly received nearly six legal notices from landlords in Delhi for non-payment of rent for months. The legal notices further allege that Cars24 has breached the contract for terminating leases before the lock-in period ended.
As per reports, the auto platform has already shut about a dozen outlets in Delhi.


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