Behind the Jio Effect

How the world's biggest startup will make more money than you will ever imagine!

 

Free calls for lifetime, free data [till 31st March (with capped usage)], free roaming, lowest data rates on earth and still Jio would be profitable. Wanna know why? Reliance Jio's business model 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 proposed analogy of mine, you will realize what a clever businessman Mukesh Ambani is.

BASICS

• Telecommunication companies divide consumers into two types on the basis of revenue, a customer paying around Rs. 150 is break even or Average Revenue Per user for them, if you pay around Rs. 250 then you're a high value customer to them.

• Jio's network is based on new technology, its an all IP network and not the circuit-switiching technology which current telcos use. Once the whole infrastructure is in place, the costs of using it would be negligible. So, when you make a call it connects through Internet and continues with Internet and ends with Internet also, very much like Skype. Charging for calls is an outdated technology.
  The only costs Jio incurs is some 14 paise which they have to pay as interconnect fee to the operator’s network you called. This should be considered a temporary operational cost. Moreover, TRAI is likely to either further reduce this interconnect fee or make it free in the near future.

POTENTIAL INCOME SOURCES

Am stressing on the word "potential" as these are the sources which I believe are income generators, which may not be true currently.

1.  Plans:
   Ever saw the plans of Jio? they are very strategically designed. To give you an overview, here's the plan in brief (for the full plan details pf prepaid and postapid with T&Cs visit here)

Jio - Postpaid plans (for the full plan visit here)

Jio - Prepaid Plans (for the full plan visit here)

• Okay so time for some observations, notice that in postpaid plans, the plan validity is 28 days, which is not a full month. Infact, if you divide, you'll get around 13 months (365/28=13.03571) so you'll end up paying for 1 month more for the same plan in the whole year. 
• Secondly, no one in the world would take a plan of Rs. 149 for data because you get only 0.3GB in that (like paying Rs.447 for 1GB?!!!), so your obvious choice would land you to the next cheapest plan, which is of Rs.499. Notice that there are no plans between Rs. 149 and Rs. 499. By getting you to their 499 plan, they already have crossed their ARPU (avg. revenue per user) and made you their high value customer who pays Rs. 499 for not even a whole month!
• Same is the case with prepaid plans, where you won't take the Rs.149 plan which gives you 0.3gb data, instead you will choose the Rs. 299 plan at least, thereby again surpassing the ARPU and this time you'll pay it for just 21 days, that makes it close to around 17 months (365/21=17.381) so you'll be shelling out 299 for 17 times in a year if you stick to this plan, genius indeed! 

2.  Lyf Smartphones:

Apart from being a telecom operator, Reliance has brought into the market its own range of 4G VoLTE range of smartphones under the brandname LYF. There are huge margins here believe me. Getting a phone like contract manufactured from any factory in China (there are a dearth of 4G phones there) and "dumping" the same in India. Great profits! Since, Jio is a 4G only network, hence it required handsets which are 4G compatible and VoLTE enabled (for voice calling) and cheap as well, to capture the mass market. no wonder, Reliance hits the bulls-eye here!

3. Jio Apps:

Jio has released every possible app with Jio Branding - JioCinema, JioTV, Jio Mags, Jio Newspaper, Jio Xpressnews, Jio4gVoice, Jio Music, Jio Cloud, Jio Security, Jio Money, etc. etc.) These apps are cash cows, they also come pre-loaded with LYF Smarphones and free till 31st march after that, subscription charges for these services! Another great source of income!

4. Selling Your Data:

This one is which you're not gonna believe, but it is done by every telco in India, selling your data history to companies which in-turn show you advertisements. Yes, they do it, and they earn fabulous amounts of money for it too!! User base is the most precious asset to any company today, Why is facebook so powerful? because facebook has data profiling of around 1.79 billion users (for source of info. click here) in the world including their interests, likes, dislikes, location, photos, every damn thing!

So whenever you browse or surf the internet through Jio, it creates a data profile(profiling your browser history)  of every SIM (coz every SIM has a unique ID through which it communicates with the network), and sells this data to the companies who profile you for advertising! Cunning, isn't it? I'll explain it more in my future blogs!

In short, Jio is earning heavily by selling your data too!

I know I know what you are thinking, how can they achieve profit in just one year by investing huge sums of money in setting up the infrastructure???
Well, according to basic laws of economics and business studies, no business can break-even in its first year of operations, neither will Jio, but they sure as hell would be profitable in the next 5-7 years (some analysts believe this would be achieved in 2-3 years as well!). But the rate at which they are growing and penetrating the market is truly laudable and can be a perfect example of successful businesses.

Please do share and comment if you like the article! :) 

Froktech recommended tech reads

For that bookworm in you, here are a list of tech reads which you should check out!

To brush up your tech know-how and make you realize the surveillance world we live in, here are the Froktech's bucket list of winter reads which you should add on your bookshelf!

1. Data and Goliath: The Hidden Battles to Collect Your Data and Control Your World

Choosing the best SD card for your phone

Why you need a better SD Card for your phone, like right now!!

Does your phone takes up a lot of time accessing your files from the SD card or eventually it hangs while doing so? the culprit may not be the phone the but memory card you're using with it.
So often it happens when we buy an SD card for our latest smartphone we unassumingly buy the cheapest one from a reliable brand (say an 8gb SanDisk microSD card), knowing it to be the best solution of our storage woes.

This purchase of yours, will make your phone slower! YES, it will, in the long run, it will cause more problems instead of solving them.
Why is that? Coz when you buy the cheapest one from the market, it comes with slowest read and write speed. Read and write speed is basically the copying speed of the SD card to and from your device.
So whenever your swanky new smartphone with the latest processor accesses your files from the SD card, it takes time....which makes you think that your phone is slow. Actually the SD card is delaying the result because of its slow read and write speeds. This delays the overall result and makes you think that your new phone is not upto the mark.

THE SOLUTION

Well basically, SD cards these days are termed in different "classes" on the basis of their speeds, these are as follows:

You might really be using a Class 2 or Class 4 SD card for your phone, which is good for basic tasks, but nowadays where we watch movies on the go, download every app, take selfies like crazy, Do Snapchat, Whatsapp and what not. The SD card required for this kind of media frenzy is definitely not a Class 2 or 4 but a Class 6 or 10.
(Mark 1 or Mark 3 SD cards are usually used by pros for 4K capturing and recording, and of course, they are insanely priced, so lets ignore them unless you are a pro!)

IDENTIFICATION MARK

Every SD card contains an identification mark on its front side that identifies its class, which in turn denotes its speed (you can see the speed of different classes of SD cards from the table above). Below are the examples for your reference:

 Class 2 SD Card
 (notice the number 2 encircled)










                                 Class 4 SD Card (number 4 encircled notifying its class below)

 










                             Class 10 SD Card (Number 10 encircled denoting its class below)

So for your daily routine, a Class 6 or preferably a Class 10 SD card would be a great buy, complementing your phone with speed and efficiency it deserves!
Below I have shortlisted some of the good brand of SD cards which you can buy online (because online shopping is the way to go now!!)

Class 10: SanDisk, Transcend, Kingston

Class 6: Samsung
 
Hope his article makes you aware of the some of the basic tech tips which you should follow, please share if you like it to spread this info!