JIO Featured phone: All you need to know How Do they make money?

Reliance Jio 4G VoLTE feature phone has been announced by Mukesh Ambani at the company’s Annual General Meeting (AGM). The Reliance Industries Limited chairman called the new JioPhone ‘India ka smartphone’, and it comes loaded with features like expandable SD card slot, 4-way navigation, and more.

Let have a brief info about the plan:

Coming to tariffs, users will have to pay Rs 1500 security deposit for three years, which comes down to Rs 500 a year. Jio has introduced recharge plans as well sachet packs, which start at Rs 153 per month. It gives users unlimited data on this 4G VoLTE feature phone. This unlimited data has 0.5GB or 500 MB FUP per day, which comes to 14 GB for the recharge period.

Today people are surprising with ZERO cost JIO Phone but understand the Ambani’s calculation.

How JIO is making money from that and HOW MUCH

Let’s assume 20 Cr. customer (out of 70 Cr. feature phone users) will buy this mobile

so, 20cr * 1500 deposit = 30000 Cr.

Now every customer will pay 153 rs./ Month means 20Cr. * 153 * 12 months = 36720 Cr.

(1 year revenue = 30000+36720=66720 Cr. )

Now consider 10% additional customer every year so at 3rd year customer base would be around 24.2 Cr. So revenue 24.2 * 153 * 12 Months = 44431 Cr.

At 3rd year 44431 Cr + 30000 = 74431 Cr in book.

Now, from collected 30000 Cr from deposit he may earn 12% return through investment. So in 3 years earning is 10800 Cr.

44431 cr by recharge + 30000 cr by Deposit + 10800 cr by interest = 85231 cr. Revenue

He will return 30000 cr. to his first year customer base means 20 cr customer.

85231 Cr. – 30000 Cr. Return to customer. Remaining 55231 Cr. (Not considered 2nd year added customer’s deposit)

This 55231 Cr. from only JIO Feature phone .

Now after 3 years JIO Subscribers 20 Cr. (Today 12.5 Cr) means 20 Cr. * 303 recharge * 12 months = 72720 Cr.

JIO Feature phone + JIO Subscriber = 55231 Cr. + 72720 Cr. = 127951 Cr. Revenue in 2020.

“It’s bigger than any Industry size “


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