Amazing Business Model Of Reliance Jio

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On September 1st, 2016, the word – “Reliance JIO” started trending world-wide across various social medias and blogs when Ambani announced Reliance’s new 4G services. This thing surprised every data users and even other network operators like Airtel, Idea etc. There were so many news, blog posts, trolls all over social media about this new Reliance JIO 4G plan. Everyone will start availing this Reliance Jio service from Sep 5th onwards.

Reliance JIO

In this article, I’m going to explain you very clearly every little master plan strategy behind the business model of Reliance Jio. 

The surprising thing about this Reliance Jio service is that

How Reliance afford to offer 4G plans at such cheap rates?

How is it possible to offer unlimited (Local/STD) voice calls free to every JIO customer?

How they are offering unlimited 4G data at night?

Like that, there are still lots and lots of confusion going on in the market. This business model of Reliance is really very simple. It is to be noted that however you all are going to pay the same amount or probably even more to Reliance JIO compared to other network providers. Wondering How ??? Wait !!! I will explain you everything clearly in this article and you will get to know how witty our Mukesh Ambani is…

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Business Model Of Reliance JIO

The overall business model of Reliance JIO is designed in such a way to make more money than other plans. Even though the tariff plans look surprisingly unbelievable, yet Reliance will make more money than other network providers.

For your info, in India, the average monthly revenue per customer per user (ARPU) the telecom operators get around is INR 150 per month. If you are spending more than the ARPU, then you are considered to be a high-value customer by your network provider.

Have A Look At Reliance JIO’s Tariff Plan:

Reliance Jio Tariff Plan

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Which Plan You Would Chose?

Okay, as a general random user, lets chose the 1st plan S, i.e., INR 149 per month plan. This plan is suitable if you are a voice-only kind of person. You will be getting free voice calls, 100 free SMS, 0.3 4G data pack with a validity of 28 days in this pack. Though you’re getting all these at just INR 149 per month, yet Reliance makes that ARPU as good as other network providers. This plan is only good for those who spend more than INR 150 per month for voice calls alone. So the point to be noted here is that Reliance is still making good ARPU than other network providers even after providing all the features for free but by just pricing things differently. So you are actually spending the same amount per month as before.

Don’t you smell something fishy behind that 28 days validity for all plans ? Let me clear that for you. Divide the total number of days per year by 28 (365/28 = 13.03). Got It ? Still Not ? The fishy thing is that we are actually paying for 13 billable months in a year. What An Idea Mukesh Sir Ji !!!   🙂 

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Reliance JIO 1GB Data Plan VS Normal 1GB Data Plan Rates

After excluding the unlimited 4G data at night and the WiFi data, the cost of 1 GB Reliance JIO data compared with normal 1GB data rates is shown in the table below:

0.3GB for INR 149 Equal to (approximately) INR 497/GB
4GB for INR 499 Equal to (approximately) INR 125/GB
10GB for INR 999 Equal to (approximately) INR 100/GB
20GB for INR 1499 Equal to (approximately) INR 75/GB
35GB for INR 2499 Equal to (approximately) INR 71/GB
60GB for INR 3999 Equal to (approximately) INR 66/GB
75GB for INR 4999 Equal to (approximately) INR 66/GB

Have you noted the trap ? Even their highest plans don’t cost as low as their advertised INR 50/GB rate. What An Idea Mukesh Sir Ji !!!  🙂 

The Story Behind Their Unlimited Night Data

The thing is that once a company have built its entire network infrastructure, it will cost nothing for that company to provide you with internet data.

The reason why most network providers limit your data is that because they don’t have enough bandwidth to handle all our data. But in case of Reliance JIO, the company have already established an awesome fiber optic network which is capable of handling even 5G and 6G. So, it will not be a big issue for Reliance to provide that unlimited night data. What An Idea Mukesh Sir Ji !!!  🙂 

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But How They Can Provide Unlimited Free Voice Calls?

Yes, Reliance can provide unlimited free voice calls because they have their own IP Network. All your calls are routed through internet just like in Skype and WhatsApp. And they should not really charge for voice anymore. We have this feature in WhatsApp as WhatsApp call and even in many more applications. The thing is that our internet usage community is not getting good internet connection and once it happens, we all will start using these features. What An Idea Mukesh Sir Ji !!!  🙂 

How They Make Money With LYF Phones?

I hope that you all know about their LYF phones. Many of my friends bought these phones just to get access to their JIO sim card to avail their free unlimited preview offer.

JIO LYF Phones

Did you ever wonder why these phones have so many versions that too with such low specs compared to other similar rated phones in market? The only reason people bought these phones is because of availing their free unlimited preview offer.

This is a very witty move by JIO. Read the following points to know why I said like that:

  1. Reliance JIO would have bought these low spec cheap phones from China in bulk amount. No one wants to buy these old outdated cheap phones in bulk, so the manufacturers will happily sell it and that too for a very low prices. So it is very clear that these phones are made from very cheap previous generation components available in the market.
  2. All these manufactured phones are re-labeled and sold in India. That’s the reason for different versions of such low spec LYF phones.
  3. Thus they are making huge profit from this LYF phones. What An Idea Mukesh Sir Ji !!!  🙂 

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The Real Money Is In JIO Apps

As like their LYF phones, everyone will consider their JIO Apps as bloatware and will don’t even install it. But you know what, those apps got real potential in them.

JIO APPS

  • JioPlay: This TV app can make it big one day. They can even make this app to broadcast directly to TVs just like Google Chromecast.
  • JioMoney: This app will surely dominate the payments industry in India and even all around the world. I can bet that this will easily take on other competitors like Paytm, Freecharge and other wallet services easily.
  • JioMags: This e-book app is really superb comparing to other apps available in the market. There are so many popular magazines to read in this app.
  • JioDrive: This app has got the potential to replace the usage of Google Drive, DropBox, OneDrive in India.
  • JioBeats: This audio app has the potential to become the Spotify of India.
  • JioOnDemand: This app has the potential to become the Netflix of India.

These are some main apps under Jio Digital Life Services branding and the other service apps are JioXpressNews, JioChat, JioSecurity etc.

Like these apps, they can make any type of dominant app in future to dominate the market. Currently these apps are available for free and the reason for this is that they want to increase the users. Once after they got some decent user groups, they will start subscription charges for these apps. Moreover, one important point to be noted here is that these all apps are locked to JIO Network. That is, only those who have access to JIO network can use these apps. So people will gradually shift to JIO for using these apps. Currently, only Airtel is capable of competing with Jio but even they soon will lose within some point of time. What An Idea Mukesh Sir Ji !!!  🙂 

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Reliance JIO Master Plan

Reliance JIO is actually taking a very calculated risk. Their master plan approach of their business model goes like this:

  1. Undercut the market price by introducing their Jio Plan.
  2. Let everyone switch to Jio service for voice calls, data packs, Jio apps etc. gradually.
  3. Unleash their power of fiber optic network to provide unlimited super fast internet to its users.
  4. Slowly grow their subscriber base in every field like network, phones, apps etc.
  5. Then recover their huge investment from such large user groups.

This whole master plan of this business model depends on only one single thing : VOLUME

If they are able to get this volume, as high as possible, then they are unstoppable. What An Idea Mukesh Sir Ji !!!  🙂 

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A Final Verdict

The one good thing about Reliance JIO is that it forced other rival telecom operators to cut their prices for calls and data packs.

Even though their LYF phones have low specs, it costs cheap and makes it affordable to bring 4G services to many homes in India.

From the customer point of view, we will be getting good advantage for our money from this Reliance JIO. And from Reliance side, they will also be making good money as like existing telecom providers just be pricing things differently. So, overall its a win-win situation for both the company and the customers. We need such bold moves from companies like Reliance because it will create a revolutionary change in countries like India and will change our quality of living. Also more number of people will get job opportunities because of such changes.

Mukesh Ambani

What An Idea Mukesh Sir Ji !!!  🙂  😎  😉 

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