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‘Reliance Jio’ — A telecom disruption India has been waiting for ?

Unlimited free voice calls. Unlimited free Messages. 4G Data at less than $1 per GB. It certainly sounds too good to be true. However, thanks to Reliance AGM, Mukesh Ambani’s ambitious Jio program, its all possible now.

First of all, what is the Reliance Jio. Basically, it is a suite of digital services offered by  Reliance Jio Infocomm Limited. At the center of these services is the Reliance Jio SIM card, that is promising to allow subscribers to take advantage of schemes and plans that are unheard of, on the subcontinent. Announced on the 1st of September, the Jio welcome offer will kick in on the 5th. Within days of availability, the company has managed to sold subscriptions by the buckets.

Why this massive surge of interest? After all, it’s just a SIM card, with services like those offered by tens of other companies in the country. Not so. Keep on reading and try to reach the end before hopping off to buy a Jio for yourself.

Okay, so first the welcome offer. All Jio customers are receiving a bouquet of offers as part of a welcome scheme that will be effective from 5 September, 2016. Under this, users will have access to unlimited LTE data and national voice, video and messaging services along with the full bouquet of Jio applications and content, free of cost up to 31 December 2016. We will get to what these services are in a few moments.

This is being done so that users on different networks can be compelled to make the switch to reliance Jio, and it certainly appears to be working. I mean, i have personally seen people standing in lines for hours to get a Jio SIM — Unheard of excitement for a SIM card.

Speaking about the Jio SIM, Reliance AGM Mukesh Ambani had said,

Pay for only one service – either voice or data, not both. World over, operators charge only for data, voice and messaging are essentially free. All voice calls for Jio customers will be absolutely free.

The scheme is heavily influenced by those from carriers in the US, like Sprint, T-mobile and so on. Who essentially charge their customers only for data services with voice and messages ex gratis. Reliance seems to be intent upon ding something similar, however, the pricing it has set for its data is honestly surprising. Let’s take a look at the Jio data plans.

So the plans start from INR 149 for 28 days where you get 300 MB data for 28 days. Next up on the ladder is the INR 499 per month plan, where you get access to 4GB of 4G data and unlimited 4G at night, for 28 days. Also bundled is 8GB of access from Reliance Jio’s upcoming network of Wi-Fi hotspots, further increasing the amount of data you can use.


If that isn’t enough for you, you can opt for the INR 999 plan that gives you up to 10GB of 4G data, and 20GB of Wi-Fi usage along with unlimited usage at night. Then there is INR 1,499 for 20GB, INR 2,499 for 35GB, and INR 3,999 for 60GB of 4G data, and twice as much data again through Wi-Fi usage respectively.

And if even these plans are not enough for you, you could opt to pay INR 4,999 for 75GB of 4G usage plus unlimited 4G usage at night, and 150GB of Wi-Fi data.

Investors aren’t buying into this

So if everything is rosy, why did Reliance Industries limited (RIL) stocks tank by over 2.5% in yesterday’s trading ? RIL lost close to 9,800 crore of market capitalisation in a single day, even though there were social media posts from people not even remotely close to finance/banking, talking about how Idea, Vodafone India and Airtel lost money.

Just to inform those uneducated lot, they actually didn’t. Its Reliance that’ll lose a lot more money to get customers to leave their current providers. Investors have a feeling that the company has to really prove a solid revenue model here (yes, someone like Reliance too has to do that) with the kind of schemes Mukesh Ambani so merrily launched yesterday.

Experts are also of the view, that despite free voice calls and all that stuff, these plans still aren’t good enough to create a revolutionary shift in customer base for any of the other providers.

Lets take a look at the math. At the most basic plan, you are getting 300 MB data for INR 149. So, that is certainly not cheap and indeed, is very expensive. However, once you graduate to plans situated further up on the ladder and start counting the Wi-Fi data as well, the picture really changes. The INR 499 plan for example, is giving you 12GB ( 4GB + 8GB from hotspot) of data, which does equal out to less than INR 50 per GB. And that is not even counting the unlimited usage you are allowed at night.

The INR 4,999 plan is even cheaper and it costs you only around INR 23 per GB of data, so you see, the more data you use, the cheaper is the cost per GB. But then, its 4999 !, which I have never seen someone spending on data.

Current market practice is to charge for data a base rate between Rs. 4,000 and Rs. 10,000 – Jio will have a base rate which is 1/10th of this. Our data plans go even further with an effective rate of 5p/MB or Rs. 50/ GB.

Also, students will be able to enjoy the benefits of 25 percent extra data when signing up for A jIO SIM.

Promoting LYF

For those who don’t have access to smartphones, Reliance is also offering affordable 4G smartphones from LYF at just INR 2,999. While we can not comment on the quality of these phones, we do know for a fact that people have already started using them as Wi-Fi routers by creating mobile hotspots — and the data speeds, at least here, are pretty awesome.


If you want to buy smartphones from LYF that are more feature-rich, you can do so by spending a bit more. Improved, feature-rich phones are available at INR 3,999, INR 4,999 and so on.

Reliance has also put out a suite of applications that include the JioTV, JioNet, JioMags, JioPaper, JioNews, JioMusic and others. The subscription to all these services will set you back by around INR 15,000, however, they are essentially free for a year as part of Reliance’s welcome offer.

Indeed, in certain areas, retailers are requiring you to install all these applications on your smart-phone, generate a code and submit the printout of a screen-shot of the said code with your ID proofs, before you can get issued with a Jio SIM. But again, that varies from area to area.

Now, why did Reliance initiate a service like Jio, rather than comfortably charging hundreds of rupees for data, just like other manufacturers. Well, as per a presentation Mukesh Ambani gave on the topic,

Life is going Digital. India cannot be left behind. India is ranked 155th of 230 countries. Jio will take India to top 10 globally.

Well, certainly. However, this may also be an attempt to revive Reliance in the field of communications. It was only a few year ago that Reliance was the name in field of mobile based communication and indeed, was one of the pioneers in bringing mobile technology to the country. However, things have been on a downhill slope ever since and Reliance communication, which is an Anil Dhirubai Ambani entity, has lost most of its luster.

Here is a quick run-up of Reliance Jio’s features.

  • Benefits of technology would be passed onto customers. All domestic voice calls for Jio customers will be absolutely free, across India and at any time. Domestic roaming charges will not apply in Jio tariffs.
  • Data tariffs have been made highly affordable, with full transparency, without any
    associated conditions. The Company is offering the lowest LTE data rates in the world.
  • Additionally it would offer unlimited night time LTE data.
  • The Jio-Apps bouquet, which is worth Rs. 15,000 for an annual subscription, will be available complimentary for all active Jio customers up to 31 December 2017. This has been done to make Digital Life available to everyone.
  • A special student discount offer, with 25% more data on the main tariff plans, would be offered to all students.
  • Jio has introduced a simple tariff structure with only 10 main plans, designed to fit every budget, as against the 22,000 tariff plans prevailing in the country today.

Reliance will be covering almost 18,000 Cities, 2 Lakh villages under its Reliance Jio. The service is also future ready and will offer support for 5G and 6G technologies, once they are introduced in the country.

Well, this is certainly a masterstroke on Mukesh Ambani lead Reliance’s part. While this may certainly propel India to the forefront of the digital world, provided that it can take the strain, it may also be capable of providing huge business benefits to the Reliance Industries businesses. We can only assume that the model is profitable, although the margin is certainly likely to be significantly less than what the other carriers are offering. However, if it’s sustainable and profitable, the very volume of subscribers may make up for the low cost.

The move is likely to bring down overall data and voice call charges down as well, if the other carriers want to stay in a position to compete with Jio. We are already hearing of companies launching new schemes to take on Reliance Jio. Stay tuned for any updates on the same, and meanwhile, if you are thinking about getting a Jio SIM, get it now before it runs out.

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‘Reliance Jio’ — A telecom disruption India has been waiting for ?


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