A Detailed Analysis Of Jio and Its Business Model

A Detailed Analysis Of Jio and Its Business Model

Are you among the people who have just gone crazy on the JIO thing??? Yeah, JIO has been one the most awaited thing of 2016. This wait resulted in a positive way & 3 days before the owner of Jio, Mukesh Ambani launched the JIO tariff plans for PAN India in it’s annual business meeting. Today we are gonna discuss the same thing here, Is JIO Really Cheap As It States? Or Just Another Marketing Tatic To Earn More Profit:- THE BUSINESS MODEL!! The post is gonna be a little long but believe me after reading it, you will get all the info regarding JIO that you wanna know 😀

Reliance JIO 4G

It all started back in 2010 when Infotel Broadband won the 4g spectrum auctions in all sectots of India. Later that year Mr. Ambani bought 96% of the company shares and took it under his control. Some time after the company was renamed as “JIO” & started building fiber optic network around the country. And in mid 2016, after 6-long years his dream took a proper shape. Yeah, he waited for 6 Long Years!!!

Coming back to the main point, you have been thinking that Jio is a Socio-Welfare program launched in respect of Digital India, (our PM Narendra Modi’s dream project) but however you are wrong. Everything Jio have done till now is intended at making money. Their tariff plans may look unbelievably awesome, but they will make more money by giving free voice calls than what the other companies make by charging you for it! Jio has been performing diplomacy at its peak!

Considering the facts, in India monthly average revenue per user (ARPU) that current network providers get is around Rs 150 per month. That is the money they get on average from each user. Have a look on the Jio tariff plans above. If you are a normal customer, you will prefer the Rs149 plan for 28 days as you will get unlimited voice calls through it. But since you are getting charged for your voice calls, you are already paying them Rs150 or more which makes their ARPU be as good as the current players (operators). The point to think is, other operators are making Rs150 where you are charged for voice, text, data, roaming & Jio will be too making Rs150 on average by giving voice, text, data, roaming for free just by pricing things differently!

Coming up the further plans, you will find Rs499 plan very beneficial as it offers much more 4g data & Unlimited 4g data at night so most people will opt it as compared to the Rs149 plan. But did you notice there isn’t any plan b/w 149 & 499! This is basically a psychological trick to get you into the Rs499 plan by making you think about the comparison & benefits of both, as stated above. Once its done, most people will opt the 499 plan as compared to the Rs149 plan. Another thing to notice is how can Rs500/28 days fixed rate become cheap???

Now if you require more than 4GB per month say 6b, then u need to move in to the 10GB plan & pay double, Rs999. Did you feel the sudden hike in the price by Rs500! Again, there isn’t a plan between the two!!!

They have some smaller plans at Rs 19, 199 and 299, but these plans do not really offer any more value than their main plans as they have even less validity. Also since they don’t have any voice plans separately, you need to be on one or the other data plan to use calling!

Remember:Jio plans aren’t costly but they aren’t too cheap as we think of!!

The Actual Cost Of A GB JIO Data

We have been listing the fact that JIO is providing data @Rs 50/1Gb, which is the lowest price in the world. However its not true as it sees. Let’s see their per GB price in each data plan:-

0.3GB for Rs149 = ~Rs 497/GB (Whose gonna pay that much?)
4GB for Rs 499 = ~Rs 125/GB
10GB for Rs 999= ~Rs 100/GB
20GB for Rs 1499= ~Rs75/GB
35GB for Rs 2499= ~Rs71/GB
60GB for Rs3999= ~Rs66/GB
75GB for Rs 4999= ~Rs66/GB

Did you see that even their highest plans doesn’t go as low as their advertised Rs 50/GB rate.

Upto now, your mind may have started troubling you about What you thought about Jio & What it actually is! Still there comes a point which may win your mind again “ “Jio Provides Unlimited 4G Night Data” The fact is very true. Jio will be providing Unlimited Night 4G Data, what else anyone wants! But it isn’t a big thing actually. The reason why other companies don’t provide unlimited data is that their infrastructure isn’t capable to handle that much of data. They use old 2g/3g servers which are based on outdated tech & can’t handle note than its limit at any cost. Whereas, Jio has great infrastructure based on fibre optic networks & is even capable of handling 5g/6g connections in near future. So providing unlimited 4g data isn’t a great deal for since it has proper infrastructures.

Jio Premium Apps Subscription

Jio Premium Apps Subscriptions are free till 31st December 2017. (yeah not 2016, its free till 2017 end) After that, they will start charging you money for accessing the apps. And yes, they are pretty costly.
So once you become addicted to the apps for 1 long year and then you are most likely to subscribe them. Also your apps data usage will be cut off from your Data Balance.
For ex:- You subscribe to Live TV paying Rs349/month and you watch a movie for 2 hrs and it will deduct the data you consumed from your Subscription Plan. So its yet another way to make you subscribe to high data tariffs!

Another main question arises How Are They Capable Of Providing Free Unlimited Voice Calls???This is another easiest work for Jio to do. Since Jio networks are based on 4G Optic-Fibre technology, it doesn’t cost to call at all! It’s same as the call we do using social apps like What’s App, Hike, FB Messenger & many others. They all use the same tech to perform calls over internet. Accordingly, Jio uses its networks with same tech to provide free calls but with a better quality.

Lyf Devices & Jio Jio’s current earnings have a great influence by the Lyf Devices. Lyf Devices are owned by Mukesh Ambani indirectly. Bringing the Jio 3month preview offer with Lyf devices has increased the company sales & made it the 5th highest seller of smartphones in 2016! Now u can imagine the revenue he earned from them.

If u have noticed, all the Lfy devices have very Mich difference b/w its all the phone models. Actually, Lyf phones are based on a outdated technology which no one wanna buy but by connecting it with the jiopreview offer, the company raised its sale to a great extent & hence now everyone wanted a Lyf Device which wasn’t even thought of by anyone! Its another Business Tactic 😉

Jio Effect On Us

Jio customers will considerably get much more data than they get at current time but still the amount paid by us will be quite same. Understand it using given example.

If you are someone who uses 5GB of data every month, and you were currently spending Rs 1000 per month with the current providers, you will be happy that you can get same amount of data for Rs 500. But, you are likely to spend the same amount of money over the time and consume 10GB of data for Rs 1000, instead. This is because 4G speeds are awesome and now there are many more ways to spend the data. And, since you have the budget for it, you are likely to spend more.

So, even though you are getting much more value than the current operator, Jio can still make the same/better revenue. This may not be applicable to everyone, but may happen to most people.

Conclusion

Yes, companies like Jio are much needed in India to boost up India’s Digital & Telecom growth. Jio will surely enhance the standard of living of Indian citizens to a next level. No doubt on it!

By just making their tariff plan in such a way that most people interested in 4G have to pay over Rs 500 per month, Jio will be making way more money than the current players. Most of the high value customers of other players will instantly port to Jio, and they maybe able to achieve a huge market share in next couple of years.You, as a customer will get 2x to 3x more value for your money, yet Jio will make make as much profit as existing telecoms by pricing things differently.

When their apps, devices, and fiber services are added up, they are here here to win multiple business verticals. And, at current stage, they are almost unstoppable!

Source:- Internet, Quota & Of Course Me :-p

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