Reliance Jio appears to be the poster boy for market disruption in the telecom industry. Look at the wave it has managed to create in less than 6 months since its inception into the industry. The name is almost ubiquitous now, almost everyone knows who they are and what they offer. It almost looks like a real world incident of the Kingsman movie, except that the only thing exploding here will be Reliance’s user base instead of people’s heads. Jokes aside, we got ourselves the SIM to test it. Yes, we got it to “test” it and not to enjoy the free data and calls for 3 months, now quit laughing (psst, I totally got it to enjoy the free data, I hope my editor overlooks this).
After having our time with the SIM and the analysing the data speed it provides, we started asking ourselves “How can Reliance give all this for free?”. Right from the free data to all the services like Video-on-Demand, etc will definitely cost Reliance at least 800 rupees per SIM per month and on top of that, they are providing unlimited data as well. So, how does Reliance do this? Surprisingly, there is a technical-cum-business explanation to why Reliance is doing this. We will present our observations in points to help you understand what we have inferred so far.
1) Operating on a stand-alone 4G spectrum is inexpensive compared to operating on 2G, 3G and 4G spectrum, all at the same time.
2) But using 4G spectrum as a stand alone is complicated since we have been using the 4G bands only for data and have resorted to routing voice-over calls using the 2G spectrum.
3) In order to overcome this complication, we use VoLTE (Voice over LTE) or HD Voice which is basically transmitting your voice as data packets just like how it would be with a Whatsapp call.
4) In order to take advantage if VoLTE, phone need to be capable handling data in a particular way to support VoLTE. While it’s true that most phones can be made to support VoLTE through software updates, not every phone manufacturer is kind enough to provide one. Reliance is actually placing its bet on wide shown addition of VoLTE. It may look like a feeble dream, but Reliance is not new to the field and knows how to find its way around.
5) To make people switch to the Jio SIM, Reliance had to give them a compelling reason. This led to the partnership between Reliance and multiple brands like Lyf, Yu, Samsung, etc. Reliance is attempting to use the free data and free voice calls serve as a bait to lure customers into using the Jio SIM. By bundling apps like Jio Beats, Jio TV and Jio on-demand, JIO is giving users a taste of what unlimited data feels like.
6) Once the user base grows, Reliance will start charging for their services. Reliance hopes to achieve its targeted user base by end of December 2016 and that is why Mr. Ambani mentioned that the services would be free until then.
Even if Reliance were to double the rates, the offered services would still easily beat the measly services offered by the likes of Airtel, Vodafone and the others. This is in part due to the legacy networks used and maintained by other networks.
However, Reliance will not be the only company to offer such a service, since there are laws which prevent Reliance Jio services from becoming a monopoly and there will definitely be rival service which will attempt to offer services on par with Jio.
So, what do you think about the Jio SIM? Have you changed your purchased one? Do let us know in the comments section below.