The launch of Reliance Jio 4G service in India has created countrywide uproar. People are lining up at Reliance stores throughout the country to get their new Jio 4G SIMs as the company is offering free 4G internet till December 31, 2016 and after that, will offer the cheapest data rates. According to the company, Jio users will get the lowest 4G data rates in the whole world at INR 50/GB. Apart from that, Jio is offering free Voice calls to any network in India. But the real question is, is Jio really free? If it is, how Reliance will make money with such pricing strategy of Jio?
Every other mobile network like Airtel, Vodafone etc. in India is charging its users for voice calling, SMS, mobile data etc separately but in case of Jio, they charge in advance for their plans and give the voice calls, mobile data etc. completely free.
How Jio Makes Money? The Trick is in their TOS!
From various Jio tariffs, take the 2nd one with INR 149 for instance. They charge you 499 Indian Rupees for it and in this plan, they offer free voice calls, 4GB data + Unlimited 4G at Night and Unlimited SMS. However, if you read their TOS, it states that the Unlimited 4G at Night duration is just from 2AM-5AM. Means that they are providing users only 3 hours of unlimited 4G internet. And they have chosen such time of the night when majority of the people are asleep.
So, even though they are offering free stuff, they are actually charging you before you even start using their services. Ultimately, Reliance will make money with Jio just like any other cellular network in India.