Thursday, February 23, 2017

Reliance might earn Rs 18,675 Crores from Jio Prime Membership in the coming year

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Reliance Industries Chairman Mukesh Ambani addressed the media a couple of days back, where he announced that the company has successfully crossed the 100 million subscribers mark within 6 months. This by itself is a huge achievement for the company. Apart from that, Mukesh Ambani also announced a bunch of incentives to the existing Jio users who trusted the network and helped them grow. He announced the Jio Prime Membership which is an exclusive membership plan for the Jio users. Also, if you don’t have a Jio SIM yet, then you can get one before March 31st, 2017 and enroll for the same.

Under the Jio Prime Membership, users will get all the benefits of the Jio Happy New Offer until March 31st of 2018. In order to be a part of this and take advantage of it, users will have to pay a fee of Rs. 99 post which they can take advantage of the benefits by paying a monthly fee of Rs. 303. The Jio Prime Membership will also allow users to use all the Jio apps free for another year, which is a bonus. So essentially users will get 1GB of data per day for as low as Rs. 10 which is by far the best value for money tariff plan.

Having said that, it is now time to analyze the facts here and see what’s in it for Reliance. We don’t have a lot of companies coming daily and offer 1GB of data for just Rs. 10 every day. So we decided to do a quick math for all of you and show how much money Reliance can actually make from this. Do make a note that the numbers which you are about to see here are just an estimate based on an assumption. Hence we suggest you take it as it is and don’t come to any conclusion just yet. Eventually, we have to wait for the official numbers if and when Reliance decides to share it.

Firstly, one of the things which is very clear to us is the fact that we have 100 million Jio users on board till date. Although there are so many users on board the service, it is expected that most of them will not enroll for the prime membership and continue to use the services offered by Jio. Now, this could very well be due to a lot of reasons which we are not here to discuss. For the sake of this calculation and give you an estimate, let’s assume that 50-percent of the users end up enrolling for the Jio Prime membership. That brings us to a number of 5 crore users.

Now assuming that 5 crore users end up enrolling for the Prime Membership by paying Rs. 99, it gives us –

(5 crore users X Rs 99) = Rs 495 crore

The 495 crore is the amount which Reliance Jio will earn only through the Prime Membership (if 50-percent of the users enroll). It is definitely a lot of money, but if you think that’s it, then you should stick around till we calculate the money which they might earn when those users pay monthly fees as well. Having said that, now let’s assume that all the 5 crore users will pay the monthly fees of Rs. 303 every single month till March 31st, 2018, calculating that should give us a total amount which they might make in the coming year with the monthly fees.

For that, let’s see per month earning for all these users –

(Rs. 303 * 12 months* 5 crore users) = Rs. 18,180 crore per month.

Well, if all the 5 crore people will pay the monthly fees which is Rs. 303, then Reliance will earn Rs. 18,180 crore only through the monthly fees of Rs. 303. Yes, the calculation is definitely going out of hand, but we suggest you stick around till the end to see what we are dealing with here.

Now to finally put things into perspective, let’s sum it up and see what could be the total earning of Reliance Jio in coming year –

Rs. 18,180 crore + Rs. 495 crore = Rs. 18,675 crore

Reliance Jio might be earning about Rs. 18,675 crore in the coming year, if around 5 crore users out of the total 10 crore users enroll for the Jio Prime service and pay Rs. 303 per month till March 31st of 2018. It is definitely a lot of money but when it comes down to the individual user, paying Rs. 303 per month is not a bad deal at all since you are getting 30GB of data technically. Do not forget that there might be a good percentage of users who might also top-up their SIM while being in the Prime Membership for additional data & this could account to additional revenues for reliance. Also this calculation is for Prime Members while there might be millions who would directly opt for the prepaid options that we had shared earlier bringing in reliance additional revenues.

Having said that, let us know what do you think about the company earning through this Prime Membership and also let us know if you think 5 crore people will enroll themselves or not. According to a poll which we did on Twitter, over 75-percent of our readers said that they would be enrolling for the Jio Prime Membership which is indeed quite impressive. Stay tuned to PhoneRadar for more info like this.

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