Is Reliance Jio Mobile Connection Financially Beneficial for User

You might be wondering that topic on Reliance Jio mobile connection is slightly offbeat for this forum. The tagline of this blog is “Smart Ideas for your Money“. I try to cover each and every topic linked to the money.

The launch of Reliance Jio mobile services created a lot of buzz and traction among mobile users. You can gauge the impact of launch from the fact that telecom stocks lost 13,000 Cr market cap on the day of Reliance Jio launch. I anticipated the same in my earlier post, Impact of Reliance Jio on telecom stocks. In my opinion, the mobile connection is now a commodity and part of our daily life. At the same time, i give more importance to network coverage compared to mobile tariffs. Recently some of my friends and family members asked me whether they should opt for Reliance Jio mobile connection or not. Thus the idea of this post came to my mind.

Personally, i can go the extra mile to save some money :). To share an example, earlier i preferred online shopping of grocery. The discounts dried up and i shifted to traditional mode. From last few months, i used to go for weekly grocery shopping on Monday’s. One fine day, i read in the newspaper that the same store run super saver promotions on Wednesday. I changed my schedule and shifted grocery shopping to Wednesday’s. Always remember A Rupee Saved is a Rupee Earned.

Mobile Tariffs are too Complex to understand

Before be proceed let me clarify that unlike other blogs we will not compare mobile tariffs because these are too complex. My objective is to explain it in layman term that is easy to understand and digest. The reason being, the telecom players play around with tariff validity, pulse rate, conditions attached, limits, sub-limits etc. Because of this reason, the existing telcos are terming the Reliance Jio tariff as a marketing gimmick.

The best way to compare mobile tariff from a user perspective is to understand the current usage behavior. For example, break up of voice and data usage, local vs STD calls etc. Once these details are available then you can compare with mobile tariff offered and conclude easily.

As the usage behavior of each mobile user is different therefore there is NO POINT comparing mobile tariff’s based on certain assumptions. A particular mobile tariff might be beneficial for one user but not for another. The reason being, the usage behavior is different. If my STD usage is high then i should look for a plan with cheapest STD rates instead of the plan with unlimited free local calls.

Should i Opt for Reliance Jio Connection?

The biggest PULL Factor offered by Reliance Jio is FREE VOICE CALLS. In marketing, the catch lies in the fact to make you spend more by labeling it as FREE. For example, i always buy 200 ml shampoo bottle but during this week’s grocery shopping i saw that with 500 ml bottle, 100 ml bottle was FREE. Therefore, i was trapped and spent more because of greed to grab the FREE offer. I need not explain more :). Let’s check as a layman how to decide whether to opt for reliance jio connection or not with my own example

Step 1: You should find out your monthly mobile spend. In my case, the average monthly postpaid bill is Rs 600 (including service tax).

Step 2: Estimate the breakup of voice usage and data usage. In my case, i spend average Rs 500 on voice and Rs 100 on data including free data bundled with the postpaid plan. My max data usage on the mob is 1.5 GB.

Step 3: Find out reliance jio plans closer to your average monthly spend i.e. Rs 600 in my case. I zeroed on postpaid plans Rs 499 and Rs 999. I immediately ruled out plan Rs 999 because it means approx 66% more spending. Please remember that reliance jio plan charges are exclusive of service tax.

Step 4: In case i opt for plan Rs 499 then my monthly bill be approx Rs 575 including taxes. The reliance jio has bundled 4GB data usage in plan Rs 499 and voice calls are FREE. I am discounting free WiFi data over JioNet Hotspot. I will explain it later.

Step 5: Now the big question is should i opt for reliance jio connection. In my case, the answer is NO as there is no Financial SAVINGS as such. In your case, it might be reverse. I shared my example only for reference purpose. Moreover, being a voice user, i am expecting my current operator to drop the voice tariffs shortly. On the contrary, i will not start talking more just because the voice calls are FREE.

Early Movers to Reliance Jio Will Gain

The steps shared by me above are relevant, once the billing starts from 1st January 2017. If i shift to Reliance Jio NOW then i can save on my next 4 months bill i.e. approx Rs 2400. This explains why there is LONG QUEUE in front of Reliance Jio Stores to get Reliance Jio SIM. In other words, reliance jio is offering me a one-time subsidy of Rs 2400 to switch to their network. The average ARPU of a mobile user in India is Rs 150. Therefore, a common user may stand to gain Rs 600 during initial FREE Period. HOLD ON, before you rejoice check the point no 1 in next section.

In my opinion, it is a gamble from reliance jio perspective. There is a large chunk of users who believe in USE and THROW strategy. They will opt for service and use it during the FREE period. After that majority may switch to some other operator. I can say FREE Period is BOOM for cost-conscious customers especially low ARPU customers, students, and migrant labor.

Reliance Jio Mobile Connection – 5 Imp Points

1. Wait for existing operators to react

Most of the existing operators have already dropped their data tariff by 1/3rd. The voice tariffs will be next to follow. The benefit of Rs 600 will be softened because of tariff reduction by existing operators. I expect the net monetary benefit for the average user to be approx Rs 300 to Rs 400.

The existing operators may not react immediately like when Tata Docomo launched per sec billing a few years back. The existing operator toed the line only after 2-3 months. Now you must be wondering what should i do. The answer is very simple. Send a request to port out to your existing operator by sending SMS Port<space>Mobile No to 1900. There are news reports that telcos are offering 20% to 30% discounted tariff to users who are sending port out requests :).

Also See: 7 Tips to Save Money on Mobile Recharge

2. Beneficial if your usage is more than Rs 500

Prima facie and from bird’s eye view it seems that reliance jio connection is more beneficial for users with a monthly spend of more than Rs 500. As we saw in my example that Rs 500 is sort of threshold or break even point. On the contrary, industry is expecting high uptake from low ARPU users :). It might be a strategy to upgrade low ARPU users.

3. High Data Users:

Experts are suggesting that reliance jio plans are beneficial for high data users. The focus on Mobile App Business and Video Content will drive the data usage. In my opinion, the user should go through the finer details of the plan. For example, in the case of plan Rs 499, there is a sub-limit of 4GB and 8GB in bundled 12 GB data. 4 GB can be used as 4G data and whereas 12 GB data can be used as WiFi data over JioNet Hotspot. The million dollar answer is if there is NO JioNet Hotspot in my area then 8 GB data is of NO USE to me but on papers, bundled data usage is 12 GB :).

4. Network:

Needless to mention that any new operator in India faced network issues initially. Therefore, being an early adopter of Reliance Jio you may face network issues. Even existing operators are also highlighting in their communication that reliance jio users will face network coverage issues. Over a period of time and based on user feedback, it can be concluded how good is the network of Reliance Jio? Though company has made a considerable investment in the network.

5. Buy Secondary connection

 As i suggested to my friends and family members that if there is a strong urge to take a dive then there are 2 options

(a) In case you have dual SIM mobile or have 2 connections then you may port secondary connection to reliance jio. Here secondary connection means the mobile no not much in use. If you are satisfied with the service then you may port primary connection to reliance jio.

(b) You can buy additional connection but always remember that it may come at a cost. You have to buy a new handset if you have single SIM mobile. Moreover, only a 4G handset can unlock the true potential of Reliance Jio’s 4G services :).

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source;-Nitin Bhatia