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Is the Reliance iPhone 5s / 5c offer for you?

Reliance has made quite the splash after announcing the iPhone 5s and 5c will be available at an offer that’s quite similar to the carrier subsidy model that’s prevalent. So how does this deal work and is this for you? Let’s not waste any time in finding out.

How does this deal work?

  • You pay 3k a month for the 5s, 2.6k a month for the 5c. This goes on for two years. No down payments or security deposits. After two years, you’ll pay a rent of 1.5k a month.
  • This offer works only with certain credit cards (ICICI, HDFC, Citibank and Standard Chartered). If you don’t have these, you’ll need to pay the entire 24 month amount up front.
  • The entire amount of the transaction is blocked from your credit limit. You only pay the EMI to your card issuer.
  • You get unlimited calling (including STD) messages (including STD but upto TRAI’s limits, which are at 3000 messages a month) and data.
  • Benefits are applicable on roaming.
  • You can’t use this for commercial purposes or in a data dongle.
  • If you make the entire payment up front, you get a 6k discount.
  • You only pay more than the 3k you owe if you rack up international calls or messages (international calling/messaging is enabled by default, no deposits necessary).
  • These plans are available for new, old and ported (via MNP) customers.
  • You aren’t tied into the phone. You can use the phone with a different carrier. You can use this plan on another phone.

Reliance iPhone 5s and 5c Offer

Visit Rcom To Get the Offer Now

Is this for you?

If you definitely don’t want to use an iPhone (or specifically, either of these two iPhones), then this offer isn’t for you and you should stop reading right now.

If you have a beef against Reliance’s network, you shouldn’t read the rest of this post either.

Now that we’ve got that out of the way, lets understand this offer. The correct way to do this is to first check if we are able to recreate the benefits of this offer as if it did not exist and see how much that would cost us.

The 5s has a retail price of Rs. 53,500. If you took, say, a personal loan to buy this and paid the loan back as an EMI for 24 months, you’d be paying Rs. 2,594 a month for a 15% interest rate personal loan (which is a competitive rate today). If you were lucky and got yourself a 10% interest rate (say on an overdraft against your own funds, or borrowed some cash from your parents), you’d be paying Rs. 2,469 a month.

Now cellular plans can vary significantly by operator and usage patterns. A reasonably useful plan will cost you at least 500 bucks. If you use your phone A LOT, with voice and data, a realistic plan is closer to 1,500 a month. You could be paying much more if you travel a lot (and thereby use your phone on roaming a lot).
So, to get similar benefits, you’ll be paying anywhere between 3k and 4.5k a month (this includes amortizing the cost of the phone over 2 years).

Reliance offers you this deal at Rs. 2,999 WITH a pretty great cellular plan. So, should you take up this offer?

> Yes, if you use your phone a lot. If you have a monthly bill of 3k or more, you’re basically getting an iPhone free here. If you have a bill of 1.5k, you’re getting a phone worth 53.5k at 33k (amortized at 10%).

> Yes, if you want either of these phones and have a bill of over 500 bucks.

The caveat?

Talk to a few people and try to understand if Reliance’s GSM network and 3G works well in the areas you’re going to spend most of your time (home, office). It has to be unpleasant to be paying 3k a month when you don’t have any Reliance towers within range.

Behind the scenes

I’m always a bit skeptical of delving into how these things work behind the scenes, because, as a common consumer, I won’t have access to the rates and economies of scale that these companies are going to have. Nonetheless, here is how it works:

Reliance values the entire deal at Rs. 61,856 and gets your card issuer to give you a loan of that amount at an interest rate of 15% for 24 months.

Hacks

If you have access to cash at a better interest rate (don’t ever forget the time value of money), such as at 10%, you could pay your card issuer the entire loan amount (this is a matter between you and your card company, Reliance doesn’t care) at the beginning and structure an EMI schedule of your convenience. For the sake of comparison, if you chose a 24 month schedule, you’d have an EMI of Rs. 2,854 (saving 3.5k over 2 years). If you had access to interest-free cash, you’d save about 10k.

You could sell the phone unboxed as soon as you bought it. Assuming you got 48k for the device (I imagine the market for standalone 5s/5c instruments is going to become cheaper because of this offer) and paid that to your card company you still need to pay your card issuer about 14k. This leaves you with a plan of 680 bucks a month. If you manage to sell it at MRP (53,500), you would need to pay only 400 bucks. Not. Too. Bad.

Heck, you could sell the iPhone and buy an inexpensive, yet capable phone and you’d still come up on top. PriceBaba can help you here.

Summary

The Baba approves this offer for you if you use your phone a lot and you want the iPhone 5s/5c. But remember to check the network coverage in your area.

Guest Post by Aditya Sengupta, talk to him @sengupta

13 Comments

    • AnnkurPAgarwal1
    • November 5, 2013

    Wonderfully detailed post! Just a few clarifications
    a) You pay 3k a month for the 5S, 2.6k a month for the 5C. This goes on for two years. No down payments or security deposits. After two years, you’ll pay a rent of 1.5k a month. (For how long? When does the “contract” finally end where I can choose not to be with Reliance?) 
    b) In your hack, you mention selling the iPhone off. Has RCom mentioned if the handset’s SIM slot would be locked to their network?

    Reply
    • Sengupta
    • November 5, 2013

    AnnkurPAgarwal1

    Reply
    • VivekKhandelwal
    • November 5, 2013

    Can I do a MNP immediately after buying this plan ? I really don’t want to EVER be in Reliance Subscriber list.

    Reply
    • VivekKhandelwal
    • November 5, 2013

    Sengupta What also needs to be noted is the Reliance GSM doesn’t really have a 3G Licences in all the circles. The network quality in the Metro’s / cities that will see a uptake of such offers for Reliance GSM is nowhere when compared to a Voda/ Airtel.  The offer is brilliant but then I would never take a chance with the network quality.

    Reply
    • AnnkurPAgarwal1
    • November 5, 2013

    VivekKhandelwal yea you can MNP immediately (or as per rules) I think. But why would you do that?

    Reply
    • Sengupta
    • November 5, 2013

    VivekKhandelwal: Yes, Reliance’s network quality would be my biggest worry were I to take up this plan.

    Reply
    • harishanand
    • November 5, 2013

    Haha, fantastic take on the offer, comparing it to funding it with a personal loan. Especially loved the part about how you’d sell it, buy a Nexus 5 and still come out on top!

    Reply
    • r0han
    • November 6, 2013

    The best part of the offer IMHO is the 24-month payback period, which is twice as much as any typical Credit Card based EMI offer. Would really work out for people whose phone bills are over Rs. 1,000. Because effectively, in that 3k per month for the iPhone 5s, you’re paying your phone bill too. So for e.g. if your monthly phone bill is a thousand rupees, the remaining Rs. 2,000 x 24 months = Rs. 48,000, which is less than the cost of the phone (Rs. 53,500). It only gets better if your phone bill is higher. Using a typical 12 month Credit Card EMI, you’ll be spending Rs. 4,778 on the phone itself (assuming a 13% interest rate), plus your phone bill.

    Reply
    • JaydipParikh
    • November 8, 2013

    Awesome Insight but what if RCom is not having 3G offer in your circle ? Will it for all Circles ??

    Reply
    • r0han
    • November 8, 2013

    JaydipParikh If there’s no 3G from Reliance in a particular circle, you’ll be offered unlimited 2G data. Obviously, you’re at a disadvantage if you happen to live in that circle and want to opt for this offer.

    Reply
    • Sandep
    • November 27, 2013

    although we can take this offer from credit card or by cash as well

    Reply
    • PratikPatil1
    • February 17, 2014

    very bad service i have a issue with iphone plan change its past 1 month its not at all solved 3g data speed not good

    Reply

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