Reliance Jio versus conventional wisdom

After spending $25 billion to populate its pan-India 4G network with 100 million free users, Reliance now wants to charge them for it. It will be an uphill struggle

If Jio can convert 75% of its existing 100, it will clock a revenue of around Rs 28,000 crore off the bat

What Jio is essentially asking its customers is to pay Rs 99 to access its massive library, which was available for free earlier

Net of taxes, Jio’s Prime plan will generate an ARPU of Rs 260 monthly

There is one key difference between content providers and Jio’s content library. Exclusivity. Or the absence of it.

In the world of telecom, tariffs keep falling. Whether you’re paying for 100 minutes of voice calls or 10 GB of data, tariffs keep falling.

Unless you’re Reliance Jio. Because then, like a telecom operator version of Benjamin Button (the fictional character from F Scott Fitzgerald’s short story who ages in reverse), you’d spend between $20-25 billion to build a modern network, give it away free of cost to 100 million subscribers and then figure out how to charge them for it.

AUTHOR

Patanjali Pahwa

Patanjali has spent over seven years in journalism. He last worked at Business Standard as Principal Correspondent, where he wrote on startups, e-commerce companies and venture capital. He has worked at an array of institutions, which include Forbes India, Caravan and Outlook Business. He is a Mumbaikar, born and brought up. Patanjali did his BSc in IT from Mumbai University and then got his journalism degree from IIJNM in Bangalore. He is enamoured by Ernest Hemingway and Tom Waits and may try to sneak in references to them in his stories.

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