How JIO managing to sell out cheap plans

RELIANCE JIO BUSINESS MODEL

Around 25 million cellphones have been acquired by Reliance Jio even before its commercial launch! Reliance Jio is making headlines with it’s in pocket data packs and lifetime free calling. While the business of many telecom companies are dropped people wonder if the strategy adopted by Reliance Jio is long lasting. Here’s my take on Reliance Jio’s strategy

How is reliance making money from its plans

It’s strange to believe that Reliance Jio is earning more by providing free calls and SMS services rather than charging for them and that’s their business model.

Other telecom companies like Airtel, Vodafone in India usually earn around 150 Rs per month i.e the average amount they receive per user.

If you spend 250 Rs per month you are considered a high value customer for other telecom companies.

But Reliance has launched the plans based on pure analytics to attract the major audience. It’s analytics are beneficial for both company and customers

Look at the plan, an average moderate data user will definitely opt for the 149 Rupees plan i.e 150 are straightaway in reliance’s pocket.

But if you do close analysis there is no plan between 150 and 500, so this is purely an attempt to attract maximum audience to the 500 Rupees plan.

Now, again see that if you want to really use more than 4GB of 4G, then you have to spend double and move to the 999 plan. Did you notice that there is nothing in-between?

There are small value packs also like 19rs pack for a limited data with free calling and SMS services but that possesses typically low validity.

How reliance is offering unlimited night data????

Well Reliance took a risk to enter into telecom industry as other telecom companies are doing no good. Their services are heftily priced, data is beyond expensive with limited bandwidth. Moreover even whatsapp and other social networking apps became popular , offering free calls and messages, telco companies are still charging 1-1.5 rupee per SMS. There is no change in the pricing and reliance took incredible advantage.

The reason why most Internet providers limit your data is basically because they do not have enough bandwidth to handle so much data. In the case of Jio, they have already laid an awesome fibre optic network which is designed to even handle the 5G and 6G. So, they do not have much of the data bandwidth problem.

Other telecom companies were primarily made to handle voice calls and they have limited data bandwidth. Also, other companies do not own nationwide fibre network, so they have to pay to use the fibre network of other companies. This is the reason other companies don’t usually provide unlimited plans.

Targets

Reliance Jio has set a target to bring 100 million customers in the “shortest time” as it rolls out its 4G network across the country, RIL chief Mukesh Ambani said today.

“I have always set impossible goals for the Jio team and they have always exceeded my expectations. So today I set a target for team Jio to acquire 100 million customers on the Jio network in the shortest possible time and create a new world record,”.

Reliance Jio has already on boarded 1.5 million users on its 4G network, during the test period. Over the past few time Reliance Jio has been expanding its unlimited calls and high-speed mobile broadband trial offer to 4G smartphone users. But by doing this it is stretching its bandwidth. Reliance Jio has total 1.5 lakh crore for 4G.

Normally, Reliance Jio plans to offer Internet speed of 8-10 mbps. Additionally, the firm has come up with 500,000 sq.ft data centre space already operational in Navi Mumbai, Nagpur and Noida, and it plans to add another 500,000 sq. ft before its official commercial launch—due in four-to-five months.

Here are few things you need to look out for:

  • The starter 150 rupees a month pack is good, but not great.
  • Reliance has a bad network resulting in weak signals and call drops. Maybe that’s something to keep in mind.
  • All packs work for 28 days, not 31 days. So essentially, in the long run, you’d end up buying 13 packs a year and not 12.
  • Other attractions Jio Money, a payment application. Besides payments, the service will also cover customer services in e-health, e-commerce and e-education.
  • Jio Play, a 24×7 catch on television for users with all channels and a backup of seven days and zero buffering time lags.

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