Jio pricing strategy

Submitted by :

Surbhi Gupta
Navdeep kour

Pricing analysis

Free welcome offer till December 31th.

Free data service for 04 months
After that, they have 10 tariff plans
Rs.19- occasional user- 1day
Rs. 149- low data user -1 month
Rs. 4999- heavy data user -1month

They target 100 million users

Lyf sets started with Rs. 2999
Jio base rate is 1/10th of prevailing players, they gave 1 GB for Rs.50
and the more you used the lower will be the rate.
No blackout days like diwali
Discount offer for students will get 25% more data on Jios tariffs
Jio is expanding its free 90 day unlimited calls and high speed mobile
broadband trial offer to HTC,intex,vivo , gionee,karbonetc.

Apps like jio on demand movies, jio live-TV shows, and jio express
news.

Strategies used by JIO The Sim slot of nearly 25 million cell phones have
been acquired by Reliance Jio even before its commercial launch. Reliance Jio
is making headlines with its easy on pocket data packs and lifetime free
calling. Never in the history of telecom has anybody witnessed a player seize
the market in a weeks time by distributing sim cards laden with unlimited
free internet. While the jaws of many telecom companies are dropped
analyst wonder if the strategy adopted by reliance Jio is sustainable. Here my
take on Reliance Jio strategy:1. Quality subscribers: Reliance jio has different strategy to occupy
the primary sim slot in the smart 4G phones by offering free 4G data.
Try to switch from broadband and Wifi-users to jio possibly will stick to
jio after the promotional period ends. They give months three months
sufficient time span to experience the superfast and the quality service
also permanently transfer to the network. Now assume 75% of its
planned subscriber base of 100 million. So by the end of year, they will
ends up with 75 million subscribers base .In India total 4G users are
143million by this year .so within these three month launch capturing
more than 50% of market share. Even if subscribers leave the
association with reliance still it would be left with significant market
share.
2. 100 million mark: They have planned to reach 90% of Indias
population by accuquring 100 million subscribers in the first year of
launch. By luring the population with the free data and calls for initial
few months, many doubts if this could result in financial gains for the
company. But by doing this it is stretching its operational and strategic
bandwidth. Currently Jio pumps 1.5 lakh crore for 4G and coverage in
almost 18,000cities and 2 lakh villages. For e.g. 50% users opting for
Rs.149 plan and remaining for higher plans. So, jio can acquire a base
of 100 million customers. Try to recover cost in first five years. Unless,
technology becomes obsolete.
3. Oligopolistic market: The market for service providers is oligopolistic
where the participants fight for market share and profits on the basis of price
and differentiated products. Reliance Jio use both price and differentiation
strategy. Plans are sells at cheaper rate also with unlimited free calling. They
are differentiated by setting up a huge bandwidth to handle the traffic
enormous data. Jio has IP network and all calls routed via internet like

whatsapp and Skype .Also once huge optimal fiber network is built no
marginal cost for company for providing call service. Hence, in oligopolistic
market if one player creates such ripple, others slash the prices. For e.g. Now
airtel gave 30 GB 4G data pack for 3 months validity at Rs.1495 or existing
users and Rs. 1494 for the new users which were otherwise sells at higher
prices. This plan launches in New Delhi which means they sell 1GB at Rs. 50.
This approach of Reliance Jio is benefited the customers as they
getting the twice value of for money while the Reliance is confident that this
will garner hefty profits in the coming future. It is bold move by Reliance and
only time will decide its impact. Till then enjoy the free 4G internet.