Launch of Jio
SAURAV
The launch of Reliance jio service has made the ground under the feet of its competitor’s tremble. Although suffering from a much delayed launch, jio is serving its purpose well; giving free unlimited data, voice calls and messaging services till January 2017. Yet how can a businessman like Mukesh Ambani who should be conscious about profit became so liberal with free services?
The catch here which most people are unable to see is that reliance only wants to make a stable customer base before they have their commercial roll out. Jio is compatible only with cellphones that support 4G and/or LTE (Long Term Evolution.) Only 5% of the total users in India have 4G enabled cellphones. This makes it easy for reliance to provide free services to this very limited audience in order to capture the market.
Reliance also wants to promote there LYF brand of cellphones. Up till last year everyone was still impressed with the speed delivered by 3G and therefore didn’t generally go for 4G enabled devices which were a little more expensive. Now Reliance released 4G enabled LYF cellphones at a price close to Rs.3000. You can keep your old phone for regular use and buy LYF cellphones in order to use free voice calling or for data usage by creating hotspot. Therefore launch of jio services also benefits their mobile segment.
For jio users it is honeymoon period but, after 3 months the plans are not as cheap as they are now. Mathematically showing, Rs 50/GB data plan is available only if you purchase their 4999 plan. The equation is 4999/75 = 67 Rs/ GB. That is profitable if your data usage is high as voice calls and message services are provided free with this package. But in India 70-80 % of the users come in the category who use data between 0.8-2 GB and there’s no plan available which offers you data in this range.
In 2002 when telecom industry was about to set foot in India and wireless telecommunication systems had started becoming popular, Reliance infocomm started with their initial offers which were unheard of at that time. At a time when operators used to charge for incoming calls and premium handsets were priced at 15000, Reliance offered handsets at 10,000 with free incoming calls and outgoing calls at 10p/sec. Customers were as excited as they are now but as soon as the services started, disappointment was looming around in the atmosphere of reliance users. Though we hope for the best we can take all these free offers with a pinch of salt. Lets see who the ultimate beneficiaries are in the game of service providers.
Launch of jio also proves to be useful for customers using services of other telecom operators. Since Reliance is quickly building its customer base and also taking up customers of their competitors, it seems that other telecom providers are going on an all-out war and lowering their prices as much as possible. Airtel recently launched a data plan in which you have to pay Rs.1498 upfront and you can have 1 Gb data at 50 Rs. for whole year. Vodafone is also gearing up to drop prices for its postpaid users. Idea is expected to slash its rates up to 50%.These maybe the rainy days for telecom operators but for customers it’s certainly the best spring they have seen till now.
The catch here which most people are unable to see is that reliance only wants to make a stable customer base before they have their commercial roll out. Jio is compatible only with cellphones that support 4G and/or LTE (Long Term Evolution.) Only 5% of the total users in India have 4G enabled cellphones. This makes it easy for reliance to provide free services to this very limited audience in order to capture the market.
Reliance also wants to promote there LYF brand of cellphones. Up till last year everyone was still impressed with the speed delivered by 3G and therefore didn’t generally go for 4G enabled devices which were a little more expensive. Now Reliance released 4G enabled LYF cellphones at a price close to Rs.3000. You can keep your old phone for regular use and buy LYF cellphones in order to use free voice calling or for data usage by creating hotspot. Therefore launch of jio services also benefits their mobile segment.
For jio users it is honeymoon period but, after 3 months the plans are not as cheap as they are now. Mathematically showing, Rs 50/GB data plan is available only if you purchase their 4999 plan. The equation is 4999/75 = 67 Rs/ GB. That is profitable if your data usage is high as voice calls and message services are provided free with this package. But in India 70-80 % of the users come in the category who use data between 0.8-2 GB and there’s no plan available which offers you data in this range.
In 2002 when telecom industry was about to set foot in India and wireless telecommunication systems had started becoming popular, Reliance infocomm started with their initial offers which were unheard of at that time. At a time when operators used to charge for incoming calls and premium handsets were priced at 15000, Reliance offered handsets at 10,000 with free incoming calls and outgoing calls at 10p/sec. Customers were as excited as they are now but as soon as the services started, disappointment was looming around in the atmosphere of reliance users. Though we hope for the best we can take all these free offers with a pinch of salt. Lets see who the ultimate beneficiaries are in the game of service providers.
Launch of jio also proves to be useful for customers using services of other telecom operators. Since Reliance is quickly building its customer base and also taking up customers of their competitors, it seems that other telecom providers are going on an all-out war and lowering their prices as much as possible. Airtel recently launched a data plan in which you have to pay Rs.1498 upfront and you can have 1 Gb data at 50 Rs. for whole year. Vodafone is also gearing up to drop prices for its postpaid users. Idea is expected to slash its rates up to 50%.These maybe the rainy days for telecom operators but for customers it’s certainly the best spring they have seen till now.
rahul kumar
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