Verbal Question of the Day: 39
Q. The number of competing service providers in the telecom sector is set to shrink from double digits to just five players. From more wholesome slices of the customer pie to more bang for the buck in a highly capital intensive business, the merged entities including Vodafone Idea Ltd. ought to be happy with the way things have panned out. Yet the situation on the ground is far from ideal. The intensity of competition with the entry of Jio has left the incumbents battling furiously to protect their turf, with tariff reductions to match the newcomer’s ‘no prisoners’ approach.
The author of the above paragraph is most likely arguing for the conclusion that:
- Increased competition can keep companies from realizing the benefits of having few competitors left.
- After benefitting from the consolidation that took place, Jio has been able to increase the competition in the telecom sector.
- While telecom companies are facing an unprecedented threat, they are in a position to realise strategic gains.
- Price competition could neutralize gains that telecom companies may have realized post the sector’s consolidation.