PRICING OF MOBILE TELEPHONY SERVICES IN INDIA AFTER THE LAUNCH OF SERVICES BY RELIANCE JIO

Abstract

The mobile telephony service rates in India are one of the lowest in the World. The rate per minute of service usage has been continually moving downwards and has exhibited a free fall after the entry of Reliance Jio- a new service provider in the mobile telephony service space. This paper explores the rationale of sharp rate reduction, particularly if the cost of service production at the demands prevailing at these prices or changes in such costs partly or wholly justify the fall in service rates. Cost & Price relationship at gross and unit level and the price elasticity of demand have been used to establish that the intensity of competition in the sector is responsible for the sharp fall in prices, and these prices are not sustainable.