Oligopoly in telecom sector in india

1. Oligopoly in Telecom sector in
India
Existence of sticky prices under oligopoly : a real life
analysis
Aditya Kashyap
Roll no. 16183
Group no. - IX

2. Oligopoly
OLIGO + POLY = OLIGOPOLY
OLIGOS: A FEW
POLEIN : SELLERS
A market form dominated by a few big firms
competing with each other, is an oligopoly.

3. Oligopoly in Telecom Sector
No. of firms : very few (less than 10)
Product differentiation :
• Differentiated in terms of connectivity
• Similar in all other features
Price makers
Free entry and exit of firms : Restricted
Imperfect knowledge : cost & quality
Interdependence of firms for Pricing policy

4. Postcard or Phone call
Chotta Recharge
Non-stop Mobile
Simply Reliance
Pay Per Second
Daily Telephone Allowances
Reliance JIO
Mobile schemes : A change in scenario

5. Implications of Price War on Consumers
Short Run :
• Firms lower prices - consumers get a better deal
• Increase in market size
Long Run :
• Quality of services is more important
• Fierce competition-fewer firms left in the market-
have better price control

6. Implications of Price War on Producers
Short Run :
• Negative impact on firms- lower prices- lower revenue-
more focus on marketing
• Some firms use Economies of Scale to combat the
situation- others ( Videocon, Telenor, etc.) suffer
Long Run :
• Firms try to reduce cost – innovations and production
efficiency
• Small firms forced to exit market– fewer firms left in the
market – better price control

7. CONCLUSION
Consequences of price war :
 Innovation and increase in product
efficiency
 Exit of smaller firms
 Domination of larger firms in the
Market
 Remaining firms enjoy greater profit
margins