September 1, 2016, and July 21, 2017, are the two dates that changed the Indian telecom market and became the No.1 Network provider in India. These are the two dates when Reliance Jio made two major announcements that declared a great war on its rivals.
First came the ‘FREE’ network. Reliance Jio was literally free for almost six months and now it offers data at very low price than any other network provider. Second, it’s Reliance JioPhone, the 4G VoLTE feature phone with some smart features that is effectively free.
Though all the specs and features of the JioPhone have not been yet revealed, the phone has already created a buzz. There are two reasons. First, it is the cheapest feature phone with 4G VoLTE support to be available in India and second the way the company is highlighting its “free” price tag.
The big question on everyone’s mind is “What does the JioPhone, which is a 4G VoLTE feature phone with Smartphone features, really cost for the user?”
Jio at the launch said that the phone is free. Jio and the word “free” rings the bell of free data in our minds. However, the story is different now. The company said that the JioPhone is free but here is the simple maths that will help you understand that there are no free lunches in life. The JioPhone’s price in India is technically Rs 0, but as usual, there’s a catch. So what is the true price in India of the JioPhone?
During the presentation Reliance chairman Mukesh Ambani said that users would be able to use the Jio phone three years and after that would be able to return it back. So, let’s calculate the JioPhone cost for three years.
1. Rs 1500 security deposit: Though the company says that the amount is refundable for 36 months, the fact is you have to pay Rs. 1500 when you are getting the phone.
2. Rs 153 plan: We are taking the base plan of Rs 153 to help you explain the maths. This is mandatory with every JioPhone. And you have to pay Rs 153. There are also higher end plans like Rs 309 and Rs 509, which also come with Jio Cable TV, that you can opt for. In that case, your expense with the JioPhone will be higher.
To keep it simple, the user has to subscribe to the Rs 153 plan while buying the phone.
Rs 1500 + Rs 153 = Rs 1653.
This is the amount you have to pay in total at the time of purchasing the JioPhone.
Then comes the recharge of Rs 153 every month, which means for a year you pay, Rs 153 x 12 months = Rs 1836. This is the amount spent on JioPhone for a year if you opt for Rs 153 plan only. If you go for higher end plans or take the JioPhone to TV cable the amount will go higher.
If you use JioPhone for three years. So for three years, you pay, Rs 153 x 36 months = Rs 5508. Now, the total amount spent by you on JioPhone for three years is Rs 5508 + Rs 1500 security deposit= Rs 7008.
In real, Rs 7008 is the amount you pay for the JioPhone for three years if you go with the base JioPhone plan.
But you also get some refund. After three years you decide to return the JioPhone. So you will get your security money back. Hence: Rs 7008 – Rs 1500= Rs 5508.
Using the same method, we can calculate the cost for the other plans too. JioPhone which looks basic but is packed with some Smartphone like features will cost Rs 5508 in real. Although, you must remember that this cost also includes the cost of data, calls, and messages you will consume.
Although, there is no such thing as a free lunch, with JioPhone you do end up getting a pretty tasty meal at fairly affordable prices. However, given the price of this phone and unlimited data, voice calls on a feature phone, the demand for this will be very high.
The JioPhone will go on sale in September, and according to RIL chairman Mukesh Ambani they will have around 5 million units is the target they have set themselves every week.