September 1, 2016 and July 21, 2017: these two dates changed the Indian telecom market. These are the dates when Reliance Jio through its two major announcements declared a great war on its rivals. First came the “free” network, which was the Jio 4G. It was literally free for almost six months and even after that it offers data at very low price. Now there is the JioPhone, a 4G feature phone with some smart features and support for VoLTE calls, 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.
Jio at the launch said that the phone is free. Jio and the word “free” rings the bell of free data in our minds. We have created an idea in our minds that when Jio says its free, it means free. This is because it has provided free services in past. Jio 4G when launched was completely free: a free SIM, free data, free SMS, free Jio apps and free voice calls. However, the story is different now.
The company said that the JioPhone is free but here’s a simple maths that will help you understand that there are no free lunches in life. The JioPhone effectively costs Rs 0 but there is minimum amount you need to pay to use it. Take a look, considering you are going to use the phone for three years. But why three years? Although, there is some confusion about when users will be able to return the JioPhone back to Jio, 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 this much 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 Rs 153 is the minimum you have to pay. There are also higher end plans like Rs 309 and Rs 509, which also come with Jio Cable TV, that can you can opt for. In that case your expense with the JioPhone will be higher.
To keep it simple, user has to subscribe to the Rs 153 plan while buying the phone.
Now the mathematics of it all
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 an year you pay, Rs 153 x 12 months = Rs 1836.
This is the amount spent on JioPhone for an 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.
Now, consider that you use the JioPhone for three years. That is fairly safe assumption. People do tend to use their phones for 3 years, especially people who use feature phones. So for three years you pay, Rs 153 x 36 months = Rs 5508.
Now, 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. If along with the JioPhone you also want the bundled accessory that Jio calls Jio Cable TV, you will have to subscribe to Rs 309 plan. If you do that, your cost for three years will be:
Rs 309 X 36 + Rs 1500 = Rs 12,624.
Of this you will get Rs 1500 back when you return the phone, so effectively your cost is going to be Rs 11,124. And so on and so forth for the plans that will give you more data.
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. Theoretically, with JioPhone and Rs 153 Plan, you will get unlimited VoLTE calls, unlimited messages and 15GB data per month. 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.