Jio nears global telecom top five by market cap; monetization in focus

New Delhi: Jio Platforms Ltd’s stock-market debut has put it among the world’s most valuable listed telecom companies, alongside Bharti Airtel Ltd. But with a market capitalization of about $137 billion (about ₹13 trillion) and annual revenue of just $15.5 billion ( ₹1.47 trillion) Jio faces a key test: turning its premium valuation into sustainable earnings growth and higher returns on capital.

Jio’s shares posted strong listing gains on Wednesday, closing at ₹1,417.50 apiece on the National Stock Exchange, 26.7% above the issue price of ₹1,119. The focus now shifts to monetization and growth beyond mobile connectivity.

Jio Platforms, the digital services arm of Reliance Industries Ltd (RIL), houses its telecom, digital applications and technology businesses, including Reliance Jio Infocomm, India’s largest telecom service provider. Telecom accounts for about 88% of its revenue.

At debut, Jio’s valuation approached those of Germany-based Deutsche Telekom, at $134.1 billion, and US-based AT&T, at $141.1 billion, according to Investing.com data. China Mobile leads the industry at about $221 billion.

But their revenue bases are vastly different. Jio reported revenue from operations of ₹1.47 trillion ($15.5 billion) in fiscal 2026 (FY26), compared with Deutsche Telekom’s €115.6 billion ($133 billion) in calendar 2025 and AT&T’s $125.6 billion that year.

“The reason why Jio is getting such valuations at par with global players is because the market is looking at future prospects and Jio’s positioning as a technology company,” said Kranthi Bathini, director of equity strategy at WealthMills Securities, a securities broking company registered with the Securities and Exchange Board of India.

“At a time when Europe and many western markets are seeing a saturation in terms of data consumption, India has a huge scope. However, to deliver shareholder returns and improve revenues, Jio will have to look at tariff hikes, expansion in other markets like the global players and value-added technology products,” Bathini said.

Jio’s rapid expansion in wireless and home broadband has also supported its valuation. With more than 533 million users at the end of June, it is the world’s second-largest telecom operator in a single country, behind China Mobile, which had about 1.01 billion mobile users. Bharti Airtel had 492 million users in India.

Yet Airtel generates higher returns on its capital. Its return on capital employed stood at 19% in FY26, against Jio’s 10.8%. Jio’s average revenue per user (Arpu) was ₹215.6 a month in the June quarter, compared with Airtel’s ₹264.

Beyond connectivity

Telecom operators worldwide are seeking growth beyond mobile services, looking to monetise investments in 5G, broadband, enterprise services and artificial intelligence (AI).

At Wednesday’s listing ceremony, Jio Platforms managing director Akash Ambani said the company would focus on AI, cloud computing, connected devices and space-based connectivity in its next decade. “In our first ten years, we democratised data, bringing hundreds of millions into digital life. In our next ten, we want to democratise every technology that can transform Indian lives: AI, Cloud, Connected devices, Connectivity even from space, and Digital services not yet imagined,” Ambani said.

China Mobile, Verizon and AT&T are pursuing similar strategies. China Mobile is investing in cloud computing, AI and enterprise digital services; Verizon is expanding broadband and using its network infrastructure to support AI workloads; and AT&T is growing its fibre broadband business and bundling it with wireless services.

Satellite connectivity is adding to the competition. Elon Musk-owned SpaceX’s Starlink is expanding its direct-to-device ambitions while exploring a broader mobile service that could compete with established wireless operators.

“JPL (Jio Platforms Ltd) has evolved from a telecom operator into a monetization-led digital platform. Backed by an integrated technology stack, Jio is building a scalable, differentiated digital infra ecosystem, with long-term earnings visibility,” said Prashant Biyani, vice president institutional equity research at Elara Capital, in a note dated 28 October.

While mobility will remain the primary driver of revenue and profitability, Biyani expects digital services, which contribute only 12% of revenue, to become an important growth driver.

Elara Capital expects Jio Platforms’ revenue to grow at a compound annual growth rate (CAGR) of 13% during FY26-29E. It forecasts an Ebitda (earnings before interest, tax, depreciation and amortization) CAGR of 16% and net profit CAGR of 23% over the same period.

Analysts’ optimism also reflects India’s relatively low digital-services penetration, estimated at 18-40% depending on the category, compared with 70% in China and the US.

Tariffs hold the key

Higher tariffs will be crucial to improving monetization. Analysts expect telecom operators to raise tariffs by 12-15% in the second half of the current financial year.

Other growth drivers include migration from 2G to 4G and 5G, upgrades from prepaid to postpaid, premiumization, rising data consumption and bundled digital services. Elara Capital expects Jio’s Arpu to reach ₹257 in FY29, up from ₹215.6 in the June quarter.

For investors, Jio’s challenge is to convert its vast subscriber base and technology ambitions into higher revenue per user, stronger earnings and better returns on capital. Its valuation may reflect expectations of future growth; sustaining it will depend on execution.