Like bulls in a china shop, the government and regulators are disrupting companies and business models by forcing ‘free’ on them. They may end up undermining free markets
From telecom tariffs to payment transaction fees, regulators seem to be favouring ‘free’ and disfavouring attempts to charge for convenience
This upends industries where companies have spent years and millions and billions of dollars to create infrastructure, brands and pricing power
The government and regulators should stop interfering with free markets and instead focus on ensuring healthy competition
Ironically, ‘free’ has the potential to destroy and reduce competition
On 1 September 2016, Reliance Jio launched as the latest entrant in India’s mature, super-competitive telecom industry. And yet in a mere five months, it was able to cross 100 million subscribers in spite of close to 90% mobile penetration, globally competitive tariffs for both voice and data, efficiently run operations and over a dozen firms.
How? Because Jio’s services—unlimited voice calls and data—were available free of cost. What might have been an open and shut case of predatory pricing in other countries was overlooked by the telecom regulator, TRAI, which bought Reliance’s explanation that Jio’s services were…
Sign up to read this story for free right now
Stories on The Ken are available only for its subscribers. Join us now to get instant access.
Complete access to all stories on The Ken. Rs. 2,750/year or Rs. 900/quarter
Dear subscriber - a lot of hard work goes into the journalism we put out. While sharing snippets or limited screenshots is okay, please avoid printing and sharing our entire articles as PDFs. Our plans are very affordable - please ask your friends to subscribe.