Mukesh Ambani during Reliance AGM 2017 announced a new feature phone called Jio Phone. The Jio Phone will be 100% 4G Volte phone. Is this phone really free? Does this phone really cost Rs 0? Let’s find out.
Yes, the Jio Phone is ‘effectively free’. The ‘effective price’ of this phone is Rs 0. But what does it mean?
Although the phone is marketed to be free or at a cost of Rs 0. The Jio Phone in reality is not purely free. As per Reliance Jio, to avoid any potential misuse, the customer will have to pay a security deposit of Rs 1500 which will be 100% refundable.
Yes! You read it right. You need to keep Rs 1500 as a security deposit with Reliance Jio for 36 months (3 years) to buy the phone.
Reliance Jio will refund the entire amount after three years.
So, in short you will not get the phone free but you will pay Rs 1500 which of course you will get back after three years but does 1500 cost only 1500 after three year? That’s a masterstroke!
Jio Phone for Rs 0 ! Let’s analyse how Jio will earn by giving it for free
There is a concept called time value of money in finance. It says today’s money is much stronger than tomorrow’s. So if you put 1500 as a deposit today after three years this 1500 wont possess the same value.
This Jio Phone is really another masterstroke by Reliance Jio. It is really hard to believe that anyone can give anything for free. Similar is the case with this Jio Phone.
Let us assume that out of 50 crore feature phone users in India, only 10 crore people upgraded to new Jio 4G feature phone, then Jio will acquire a total security deposit of Rs 15000 crore. That’s a huge amount!
Let us assume that Jio invested this money as such that they earn at an annual rate of 10%, then after 3 years this 15000 crore will make Rs 19,965 crore. Now if each and every user demands the refund of Rs 1500 (which obviously they won’t), Reliance Jio still earns Rs 4965 crore!
In short it might look Jio Phone is completely free but it is not. It is a well planned financial strategy which makes you think it as free but reality is totally different.
Jio Phone Features
- The Phone costs nothing! It is free!
- The phone is 100% 4G LTE phone.
- It supports all 22 major languages of India.
- Supports Voice Commands.
- Internet Support.
- Supprts Jio TV, Jio Cinema and other Jio Apps.
- Stress message by long pressing no. 5 button (Emergency Contact Feature).
- Advanced NFC support for digital payments.
- Automatic Software upgrade.
Extra benefits with this India ka intelligent smartphone – Jio Phone
- On Jio Phone, Voice Calls will be always free.
- Free access to Jio Apps and basic internet.
- Unlimited 4G data access
- Jio Dhan Dhana Dhan Plans available on Jio Phone for Just Rs 153 per month
- Jio Phone TV cable pack on big screen for 309 INR per month.
- Sachet packs for at Rs 24 for 2 days and 54 per week.
The Jio phone will be available for beta testing from 15 August and users can pre-book the phone from 24th August 2017.
I would also say as a consumer getting a feature phone with 4G support at just Rs 1500 (that too refundable after 3 years) isn’t a bad deal either. There are feature phones in market with similar pricing but lot less features as compared to the new Jio phone.