Reliance Jio is getting ready for a possible initial public offering (IPO) in the second half of 2020, according to media reports.

The move would be in line with regulatory restrictions allowing the Indian operator to list shares three years after launching operations. While RJio launched services in September 2016, it started reporting its numbers only at the end of March 2017. This means an IPO is not possible before March 2020.

A subsidiary of Indian conglomerate Reliance Industries, RJio was the only service provider to report a profit for the quarter ending March 2019, when it made 8.4 billion Indian rupees ($120.5 million). Recently gung-ho about its rollout of its fiber-to-the-home (FTTH) and enterprise services, it reported 306.7 million mobile subscribers on March 31 2019, giving it a 26% market share.

RJio could use IPO funds to expand into rural and remote areas. With pent-up demand for Internet services, India is recording dramatic growth in the consumption of data. RJio hopes to capitalize and believes first-time users of its apps will help it to realize growth ambitions.

At the same time, it has an eye on urban India and the enterprise segment, where there is growing interest in new technologies and concepts -- such as the Industrial Internet of Things (IIoT), smart cities, augmented reality and artificial intelligence. RJio is targeting a leadership position in these segments.

Another opportunity is India's upcoming auction of 5G spectrum. RJio has India's most advanced network, based on all-IP technology, putting it in a position to introduce 5G once it acquires spectrum. Some IPO funds could be used for trials and to support a commercial 5G launch.

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Yet even as the company continues to expand and launch new services, it is struggling to boost its average revenue per user (ARPU). While Bharti Airtel and Vodafone Idea have seen recent improvement in ARPU, RJio's has fallen for five straight quarters, recently hitting INR126.2 ($1.8) in the March-ending quarter from INR131.7 ($1.89) in the preceding one. The trend suggests consumers are not ready to abandon Airtel and Vodafone Idea and that RJio is struggling to become the provider of the "primary SIM."

An RJio IPO would follow the demerger of its fiber and tower businesses: Jio Digital Fibre and Reliance Jio Infratel. The operator hopes to attract investors for the two infrastructure investment trusts that own these assets. According to media reports, Brookfield Asset Management is planning to invest in the portfolio of 170,000 towers, currently valued at around INR360 billion ($5.17 billion). Following the demerger of its tower and fiber businesses, RJio's net debt stood at INR670 billion ($9.17 billion) at the end of March 2019.

 Gagandeep Kaur, contributing editor, special to Light Reading