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Reliance Jio 4G-The insight story.


On 1st Sepetember 2016,” Reliance Industries Chairman Mukesh Ambani said in his much-awaited address to shareholders, giving the rationale behind the move.

 “Customers should pay for only one service, either voice or data. Not both. The world over operators charge for only data while voice and messaging are essentially free"

With this statement of his,there are following things to be expected:
1)Mukesh Ambani Declares Telecom War With Reliance Jio's Debut.
2)The Reliance Jio service will offer voice-calls free and there will be no roaming charges.
3)The service is centred around data pricing, but at affordable rates.
4)Customers also get free access to Reliance Jio’s premium suite of apps like JioCinema, JioBeats, JioChat, JioWallet, etc for free.
5)Major telecom companies – Bharti Airtel, Idea Cellular and Vodafone either will lose their market drastically or will survive only if they change their business model.

Here’s a quick look at the top things to note about Reliance Jio’s 4G investment:

First: Reliance holds the 2300 Mhz spectrum across the country, 800 Mhz spectrum in 10 circles and 1,800 MHz spectrum in 6 circles. Reliance’s total investment in the Jio 4G is nearly Rs 34,000 crores.
Second: No 2G, no 3G, this one is all about 4G. Reliance’s entire network is I- based and it will only offer 4G quality services. Reliance services will be using the all-LTE (Long Term Evolution) network. Also voice services will be routed through data packs, with Jio relying on VoLTE (voice over LTE).
Third: Reliance Jio is all about creating an app ecosystem around its data services and for now it looks like a lot of this content will be free. This includes movies, television shows, magazines, video-calling, voice-calling, file-sharing.
Fourth: With Reliance Jio, the plan is not just to look at 4G data on mobiles, but also expand to fibre-optic broadband for homes. The company has also laid more than 2.5 lakh kilometres of fibre-optic cables, covering 18,000 cities and over one lakh villages and claims to an initial end-to-end capacity to serve in excess of 100 million wireless broadband and 20 million Fibre-to-Home customers

How Will Reliance Jio Make Profit?

According to some analysts-"Reliance Jio needs 75-80 million users in 2-3 years to break even"

According to RIL chairman Mukesh Ambani, the company is targeting hundred million subscribers in shortest possible time.R-Jio would need 75-80 million subscribers with an average revenue per user (ARPU) of Rs 180 for break-even over the next 2-3 years -- execution and customer care is the key.A subscriber base of 75 million with an ARPU of Rs 244 would help RJio generate revenues of about Rs 18,400 crore but these are just the assumption as the its a long term process.


Look at the Reliance Jio’s 4G data rates which are considered as the world’s cheapest plan.

 

 But here can be the catch!

It looks like that RIL wants to vanish every telecom companies in the market and they want to be a market leader and hopefully if reliance is going to be implementing everything efficiently and consistently they can be the market leader after few years.

But.................The below pun will explain the risk for users.


 Mukesh Ambani announced breakfast at Rs 2/- per plate
The Large hall was thonged by many..
..as they finished there was a second announcement
Lunch @ Re1/-
wow...the hall soon went houseful with the villagers.
..as they finished there was yet another announcement
Dinner @ 50 paise..
Fantastic...people stayed back and many others came..
Special Dessert @ discounted price 0.25/-
People turned really mad and as they chomped, gulped and went overboard with their indulgence Mukesh humbly bid bye to them and asked them not to hurry and enjoy the food thoroughly as the serving counters were to remain open.
Later the final announcement. Use of Toilet 🚽 Rs 1250/-

So is this all for trapping users? There will be only a single market leader in case we suppose that every Telecom industry will vanish after few years as they won't be able to survive in the market.Take the  example of "Railways industry" as they have the Monopoly we don't have any choices but have to pay the fare whether it increases or decreases so that might be the case similar to RIL there will only be one market leader and users will only have to compromise with the prices whatever they will set for us .As if now they are luring customers since their short term goal is to get subscriber base and once they achieve it who knows what they have planned for the long term for us? At that time we will not have much choices but to accept Reliance JIO and stick with it forever.

Reliance Jio needs 75-80 million users in 2-3 years to break even: Analysts
 

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