Reliance Jio's business model offers cheap rates for voice calls and data to customers while still allowing Jio to earn a profit. By providing unlimited voice calls for free, Jio can earn as much as other companies that charge for calls by having alternative revenue streams. Jio is able to offer unlimited nighttime data and competitive data rates due to its extensive fiber optic network. This model has disrupted telecom competitors and benefited customers with lower prices, while growing Jio's various business verticals.

1. The Business Model Of Reliance Jio
Prepared and Information Collected by :: BISWAJIT CHAKRABORTY

2. • Reliance Jio 4G services will be open for everyone to avail from
September 5.
• Offerings : - 4G Data at such cheap rates - unlimited voice calls
(local/STD) free - unlimited 4G data at night.
• However, there is still a lot of confusion in the market how they are
offering 4G data at such cheap rates? And how are they providing
unlimited voice calls (local/STD) free to every JIO customer ? How
are they offering unlimited 4G data at night?
• It is really simple. Most of you are going to pay the same or probably
more money to Jio compared to your current network provider.
• After reading this small presentation you will realize what a clever
businessman Mukesh Ambani is.
• However, Reliance’s Jio has caused a ripple in the market forcing
many rival telecom operators to slash their prices for call and data
rates.
• Reliance’s Jio has caused a ripple in the market forcing many rival
telecom operators to slash their prices for call and data rates.

3. • Ambani's 45-minute speech cost Bharti, Idea Rs 11,983 crore
Scenario in the Market Share Price movement:
• Shares of Bharti Airtel dropped 6.37 per cent to settle at Rs 310.70 on BSE. Idea
Cellular plunged 10.48 per cent to Rs 83.70, while RCom slid 8.81 per cent to Rs
49.15. Within 45 minutes of Mukesh Ambani Reliance AGM, Bharti lost Rs 12,000
crore in market capitalization, while Idea Cellular eroded Rs 2,800 crore in market
value. However, at close, the combined losses amounted to Rs 11,983 crore.
“So The Question Comes : What is the business model of Reliance Jio?”
Everything Jio have done till now is intended at making money. Their tariff plans
may look unbelievably awesome, but they will make more money by giving free
voice calls than what the other companies make by charging you for it!
In India, the monthly average revenue per user (ARPU) the current network
providers get is around Rs 150 per month. That is the money they get on average
from each user. If you spend over Rs250 per month, you are considered a high-value
customer.

5. Which plan would you choose?
• If you are a voice-only kind of person, then you would be okay with the Rs 149 per 28 days plan, as
you will get free unlimited voice calls. But, even though you are not explicitly paying for voice, you
are already paying over Rs 150 per month, thus their ARPU will by default be as good as the current
players.
• Criteria :4G Cell/Data Supportive Connectivity
• If you are someone who uses over Rs 150 worth of voice calls every month then it is a totally
awesome plan for you. But, the point is that other telecom companies make about Rs 150 per month
on average from each user by charging for voice, SMS, data, and roaming. Jio will be making the
same/more amount of money on average from each user even after providing SMS, roaming and
voice-calls for free, by just pricing things differently.
• Also, notice that all these plans are for 28 days which can easily be perceived as ‘a month’ by most
people. If we divide the number of days in a year with 28, we will realize that we are paying for 13
‘billable months’ in a year. (365/28=13.03)
What does 1GB cost ?
• If we exclude the unlimited night data and the WIFI data which many of us may not have access to,
then the price per GB of these plans will be
• 0.3GB for Rs149 = ~Rs 497/GB (Will anyone choose this for data ????)
4GB for Rs 499 = ~Rs 125/GB = 499/4 = 124.75 (125) :: 125*4= 500 :: 1GB >125
10GB for Rs 999= ~Rs 100/GB= 999/10 = 100 :: 100*10= 1000 (999) ::1GB > 100
20GB for Rs 1499= ~Rs75/GB
35GB for Rs 2499= ~Rs71/GB
60GB for Rs3999= ~Rs66/GB
75GB for Rs 4999= ~Rs66/GB
• Did you see that even their highest plans don’t go as low as their advertised Rs 50/GB rate?

6. How can they provide unlimited night data?
• Once you have built an entire network infrastructure, it really doesn’t cost anything
for the network provider to give you internet data.
The reason why most internet providers limit your data is basically because they do not
have enough bandwidth to handle so many data. In the case of Jio, they have already
laid an awesome fiber optic network which is designed to even handle the 5G and 6G.
So, they do not have much of the data bandwidth problem.

7. How can they provide unlimited free voice calls?
• Again, Jio has an IP network, so all voice calls will go through the internet just like
skype or WhatsApp. There is not really any point in charging for voice anymore. It
is an outdated system and there shouldn’t really be any surprise in why Jio totally
abandoned it.
• If hypothetically, Jio had the tariff for voice calls, then some company similar to
WhatsApp would have launched an app through which you can do a free voice call
over the internet (infact, WhatsApp itself has a voice-call option). Once everyone
has a good internet connection, people would anyway use such services to make
their calls. (So He didn’t allow his competitor to compete for this option)
So Question Comes ::: Is this good?
• As a customer, you will get 2x to 3x more value for your money, yet Jio will make
as much profit as existing telecoms by pricing things differently.

8. • When their apps, devices, and fiber services are added up, they are
here to win multiple business verticals. And, at the current stage, they
are almost unstoppable.
• Yes, we need companies like Reliance to make such bold moves and
invest in India. This is good for everyone. It is a win-win situation. It
will increase the progress rate in India and will improve our quality of
life. It will also give much-needed jobs to millions of people.