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Sunday, 4 November 2018

Reliance Jio cheaper tariffs set to end?

Jio 4G Data: Reliance Jio cheaper tariffs set to end?


Reliance Jio can find it difficult to play tariff cards in at least five telecom circles where it has achieved market share of 30% or more. The five circles are C category circles of Odisha, Assam, Himachal Pradesh, Bihar and Madhya Pradesh, where the customer's payment capacity is less visible, and it is here that in the last few months, Jio is largely grown behind its 500 Geophos, which There is a 4G-enabled feature phone. In addition to tariff cards and cheap phones, another reason for performing well in the C category circle is that it provides fully 4G services, whereas Roll-out of 4G services by officials in these circles is relatively poor.

However, analysts now find it hard to do more in tariffs in these circles without inviting the penalty provisions for violent pricing for Geo. The reason for the hindrance will be a Telecommunication Regulatory Authority (TRAI) regulatory release on violent pricing in February, which imposes up to 50 lakh rupees per circle on mobile operators, if they are involved in such practices.


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Defining for the first time violent pricing, TRAI said in the regulation that a tariff would be considered violent if more than 30% market share in the relevant market operators provide services at the cost of the average variable cost, See to reduce competition or to eliminate competitors in the relevant market. At that time, Jio did not have 30% market share in any circle, but there were officers like Bharti Airtel, Vodafone or Idea Cellular. This meant that when Geo could offer low-cost tariffs, the office-bearers used to match them only, but the first-mover advantage could not have been.

In fact, after joining the market with free services in September 2016, Reliance Jio started full practice to define violent pricing by TRAI, resulting in existing operators protesting and calling the proposal violent.

According to the regulation of TRAI, the cost fixed by the company for the purpose of running a business during the reporting period and the part of the fixed overhead raised by the company will be later replaced by the variable cost.

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Analysts said that although in the early days, bio-trend is increasing in high market share (read 30%) Circles, this will gradually increase, thus there will be limited their tariff card strategy to kill office-bearers.

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