Mukesh Ambani led Reliance Jio shocked everyone by announcing insanely cheap tariff plans and free lifetime voice calls, which is something uncommon in Indian telecom industry. Now everyone has got a question that how is jio able to give such huge offerings and how can it make money. Though everything jio offers seems pretty fine on the paper, there is surely some clever business strategy behind it. Happy that everything is free now till this December 31st. But what after that? How much is it gonna cost you? Let’s closely inspect every element and find out what this means.
(All the views expressed here are only my personal understanding after going through the offers, terms and conditions from jio. I’m not at all intended to offend jio in any way. Just thought to let people know the other side of jio as many people are not fully aware of them. Note that the article will be lengthy as the strategies are complex and in effort to make them clear for everyone, I had to write more words.)
Free calls – Jio stated that all local and STD calls will be completely free for lifetime for all plans. This is really good. But how it is possible? Since jio is a completely IP based true 4G network which interprets everything in data, calls are carried as data over its network. This is known as VoLTE (Voice over LTE). Reliance also has pan India fiber optic network. So calls from jio sim travel on completely jio network as data. As there is infrastructure available readily to transmit data throughout the country, it doesn’t cost jio anything literally except the minimal maintenance and operational costs. Calls within jio network are same as whatsapp / skype calls we do from one whatsapp user to another user. Here whatsapp is not charging us for making calls through it right? Same applies in case of jio which is taking both the software and hardware front for handling voice data. So there is not much of a sacrifice jio is doing by giving free calls. It’s just the advancement in technology and jio using it perfectly to attract users. It also doesn’t need to depend on inter connectivity like other network providers, which have licenses to only operate in few areas of the country and share their networks each other for regular call connectivity. Reliance incurs costs only when a jio user calls other network as other networks charge for inter-operability. But these costs would also be very minimal for jio because as users are getting free calls here, more users switch to jio eventually and more number of calls would happen within jio network. And also, TRAI is already in plans to eliminate inter-operability charges between networks in future, to boost connectivity in India. Moreover, Jio will be benefiting more with this move if happens. There’s one more catch in this offering. To avail free calls, you have to be subscribed to any of the plan above. So jio is making money out of you anyway in the form of data charges.
Data – If you check all the plans above, the lowest plan which has 28 days validity is Rs. 149. But see the amount of data it is offering. Just 300 MB. Even if you are a student and got 25% more data, it will be 375 MB. So this plan wouldn’t suit anybody even if you are a medium data user. So the next plan with 28 days validity is Rs. 499 with 4 GB. Considering the speeds jio offering, the average speed is 20 Mbps and the minimum we got is 10 Mbps. At these speeds, 4 GB of data also won’t last a month for an average user, unless you use it wisely. And also, after completing your data limit, you will be charged at Rs. 250/GB if you don’t use any rate cutter. If you are still on validity of a plan but finished your data limit, then there are data add-ons starting from Rs. 151 which gives a GB of 4G data and a GB of JioFi data with no validity. These add-ons only add up data to your existing plan. For instance, you are on a Rs.499 plan and finished your data limit on 15th day. Then, if you browse directly, you will incur Rs.250/GB. If you want to avoid it, you have to either buy data add-ons which adds up data to your existing plan for remaining 13 days or buy new plan from any of those 10 plans. So if you are good data user, you may end up buying more for data, or opt for a higher plan. So, no doubt that you are getting free calls and SMS, but jio is covering up all in the form of data charges. At the end, the higher the plan you opt, the more you will save on data costs when compared the per GB cost with other providers. Isn’t that clever? There is also one more catch. If you have any left over GBs in your plan and if your plan validity has ended, then the left over data will also be lost. Some networks like airtel allow you to carry forward the left over data. If you opt for a new plan and if you have left over unused data in your previous plan, then it adds up in the new plan. But there is no provision in jio like this.
Unlimited night usage – With every plan, Jio is giving night unlimited data usage. But it is applicable only between 2 AM and 5 AM. This is the time where there is less traffic and more bandwidth available. Moreover, how many days will you wake up at that time to use data? Only few does this and its costs nothing much for jio as the infrastructure is completely sophisticated. People get good download speeds here and this is where people get attracted to use jio. And also, jio apps are designed in such a way that the content is downloaded at this time. This make users eventually habituate to jio apps.
JioFi data – Along with all plans, jio is bundling some amount of Wifi hotspot data which can be used at Jio hotspots. Jio said that it will install 1 million hotspots all over the country in public places. But how many people can avail this? it is useful for only those who have hotspot near them at home or at their work place. But there are many people who commute daily to different places and consume data on the move. How can be hotspots useful for them? They may be present in big cities but what about tier – 2 and tier – 3 cities? Are 1 million hotspots enough to cover up all these cities? And also one cannot spend all the day for using data at hotspot right? The much touted Rs. 50/ GB is charged once you complete your hotspot data limit. The people who consume these much on hotspots will be much lesser in number. Note that both 4G data and jio-fi data plans with 28 days validity are calculated as a month. But in real, the left over 2 or 3 days in every month together make 30 days extra which cost you 13 plans in 12 months.
Jio apps – All of the jio’s mind in making money is put onto these apps. No doubt that they offer wonderful premium experience in media segment with exclusive TV, movies, music, news, magazines, payments, cloud and many more services in future. But there is a catch. Now that up to December 31st 2016 you can enjoy all these completely free. But what after that? Still jio is giving free subscription worth Rs.15000 i.e., Rs.1250 per month upto 31st December 2017. Note that it just only subscription. Means like a rate cutter. And you know what? The amount of data consumed for using these apps is also charged from your data plan after 31st December 2016. Jio is aiming to get 100 million subscribers within 1 year. And Jio is building an ecosystem and providing many apps which users use in their daily life making users to stick with jio for every need. As said already, night free usage allows you to use these apps seamlessly and habituate you to them. So you enjoy all these for free for a year and will be willing to pay for them to enjoy services. It’s just the same as Uber and Ola, first they gave you free rides until you get habituated to them and now? Even if there is surge, you will not hesitate to pay for taxi because of comforts you are getting. Out of 100 million, if at least 30 % of users will be ready to pay, Jio earns a lot. And also, after 31st December 2017 if you want to use these apps, you have to pay subscription fee of Rs. 1250 per month and your data is also charged for using these apps from your data plan. What a sweet way of slashing money from user? How many can avail and afford these? Let’s see in future.
LYF Handsets – Out of all phones available in the market, only 40 % of them are compatible with VoLTE. And reliance wants to capture this market. That’s why it is bundling free offer with these cheap phones at cheap prices. But all these phones are just cheap devices. Even the highest priced LYF model cannot compete with the present day sub 10,000 phone in the market from other brands. Have you ever seen a LYF phone featuring in the best phone picks in any price category in any tech blog? All those devices support VoLTE but all other hardware is completely odd and very cheap. Even the lowest device in LYF series starting at Rs. 3000 doesn’t cost reliance at least 20 % of its price. Reliance gets these devices in bulk at insanely cheap prices from china and bundling them with free offer. People just get attracted to the offer and end up buying those devices which are a piece of shit with outdated hardware.
The detailed explanation of everything reliance jio plans and offers can found in this link.
All the information about frequent doubts, phone compatibility, sim taking procedure, APN settings, can be found in this link.
So this is the complete story of the unknown side of the Jio. How do you feel about this?
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