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Reliance Jio is highly popular for having disrupted the Indian telecom space since 2016. The telco's tariff plans forced the other incumbent players in the market also to slash the cost of their plans to a great extent. After the major transformation, it looks like Jio is now in plans to increase the cost of its plans in select cities where it already holds over 30% market share.
Undoubtedly, Reliance Jio has some of the cheapest tariff plans in the country. However, the low pricing is inviting trouble for the telco. TRAI (Telecom Regulatory Authority of India) might force the telco to increase the cost of its plans in select cities.
Reliance Jio recharge plans to cost higher
As per a report by Financial Express, Jio will find it difficult to retain the low tariff plans in those cities where it holds over 30% market share. Especially, this is restricted to five cities in Odisha, Assam, Bihar, Madhya Pradesh and Himachal Pradesh. As these plans are priced too low, these might come under the predatory pricing radar of TRAI.
To make it simple, predatory pricing means lowering the cost of products and services in order to gain more consumers. As per TRAI, Jio will not be allowed to lower its tariff plan prices to a significantly low amount in the markets where it enjoys over 30% market share.
Reliance Jio has been operating by lowering the cost of its plans to grab consumers in the rural regions with its pricing strategy. If Reliance Jio is found guilty for the same, then it might be imposed a penalty of Rs-. 50 lakh per circle. Notably, this new regulation from TRAI was imposed earlier this year.
Why this new regulation?
So long Jio has been able to continue with its pricing strategy despite the presence of this regulation as it did not have 30% market share in cities. However, rivals like Airtel and Vodafone had been enjoying significant market presence. And, this justifies why the Mukesh Ambani-owned telco has been able to keep its pricing low.
Given that there is a chance for the telco to increase the cost of its tariff plans, would you continue with its services? Do let us know your opinion in the comments section below.