Oligopoly and the Telecom

Industry
By:- Working Group D1: Ryan, Sijal, Siya, Srutayus
 Abstract:
This research paper delves into the intricacies of oligopolistic market structures, with a
specific focus on the telecom industry. We begin by outlining the defining characteristics of
an oligopoly — including the limited number of dominant firms, high entry barriers, product
differentiation, and the interdependent decision-making among competitors. These core
aspects set the foundation for understanding the pricing dynamics within such markets.

To explore the concept of price discrimination, we analyse the practices of Bharti Airtel, one
of India’s leading telecom providers, through a comparative case study of Airtel India and
Airtel Africa. The study highlights how pricing strategies vary across regions, consumer
demographics, and income levels, thereby incorporating all three degrees of price
discrimination. These insights are supported by real-world examples, promotional data, and
pricing patterns observed across markets.

Recognizing the strategic nature of competition in oligopolies, we also integrate a game-

theoretical perspective, analysing how firms like Airtel and Jio anticipate and respond to each
other’s pricing and marketing strategies. This section underscores the importance of strategic
decision-making and mutual interdependence among key players in the industry.

Our methodology combines both qualitative and quantitative research techniques, drawing
from academic journals, industry reports, company financial statements, and online
databases. Through this comprehensive approach, we aim to present a nuanced understanding
of how price discrimination operates within an oligopolistic framework and the broader
implications it has on market dynamics, consumer welfare, and firm strategy.

Introduction:
The telecommunications industry within the sector of information and communication
technology comprises all telecommunication/telephone companies and Internet service
providers, and plays a crucial role in the evolution of mobile communications and the
information society.

Telecommunications has been around for a very long time in the history of mankind.
In 1979, there were ship-to-shore satellite communications using INMARSAT. A significant
advancement in maritime communications occurred in 1979. In order to improve safety and
facilitate communication for sailors and passengers who need to contact someone on land, the
International Maritime Satellite Organization (INMARSAT) was founded. The first
commercially automated cellular network was launched in Japan in 1981. The network was
originally launched only in Tokyo in 1979 and then was expanded. Simultaneously, the
Nordic Mobile Telephone system was also established in Denmark, Finland, Norway, and
Sweden. In 2003, phone calls were now capable of being transmitted over a computer
through Internet protocols. This meant that long-distance charges were not applicable, as
callers would use already-established computer networks.
The telecom industry behaves like an oligopoly. An oligopolistic market consist of only a few
number of players controlling a large share or majority of the market share and offering
similar or slightly differentiated products. There are two types of oligopolies: pure and
differentiated. In pure monopolies, the product remains homogenous, and there are very few
number of firms. A differentiated oligopoly consists of products that are similar, but not
perfect substitutes.

The factors that characterise an oligopolistic market are as follows:

 Government Influence:
Government policies can either reinforce or dismantle telecom oligopolies.
Regulatory authorities may impose restrictions to prevent price-fixing and promote
competition, while in some cases, they may grant spectrum or subsidies that favour
existing large players, reducing competition.
 Limited Number of Firms:
The telecom industry is characterized by a small number of dominant firms, as the
high costs of infrastructure development and maintenance make it difficult for new
competitors to enter the market.
 High Barriers to Entry and Exit:
Telecom markets have significant barriers to entry, including the enormous capital
investment required for network infrastructure, licensing fees, spectrum acquisition,
and compliance with regulatory frameworks. Exiting the industry is equally
challenging due to sunk costs and contractual obligations.
 Product Differentiation:
Telecom firms rely heavily on product differentiation to maintain customer loyalty.
This includes variations in data plans, network coverage, customer service, and value-
added services like bundled streaming subscriptions or exclusive content deals.
 Interdependence of Firms:
Telecom providers closely monitor their competitors' pricing and service strategies.
Price wars, promotional offers, and data package variations are often reactions to rival
firms’ moves, highlighting the interdependent nature of the industry.
 Control Over Pricing:
While telecom firms have substantial pricing power, their ability to set high prices is
influenced by competitive reactions. In many cases, firms follow a price leader, where
one major company sets the price trend, and others adjust accordingly to maintain
market stability.
 Limited Availability of Substitutes:
Although alternative communication services like VoIP, satellite internet, and
regional ISPs exist, they are not always direct substitutes due to differences in
network quality, availability, and regulatory constraints. This reinforces the
dominance of a few key telecom players in the industry.

One of the most stand-out characteristics of an oligopoly is it’s kinked demand curve. A
kinked demand curve suggests that firms face a demand curve with a distinct "kink" at the
current market price, reflecting the assumption that rivals will match price cuts but not price
increases. This leads to price rigidity and a tendency for firms to focus on non-price
competition.

Above the kink, the demand curve is more elastic (meaning a price increase leads to a
significant drop in demand because consumers switch to competitors). Below the kink, the
demand curve is less elastic (meaning a price decrease doesn't lead to a large increase in
demand because competitors will likely match the price cut).

Price Cuts: Firms assume that if

they lower their price, competitors
will follow, leading to a price war
and a loss of market share for
everyone.

Price
Increases: Firms
assume that if they
raise their price,
competitors will not
follow, leading to a
large drop in their
own demand as
consumers switch to
competitors.

Price Rigidity: Because of these assumptions, firms are hesitant to change prices,
leading to price rigidity or "stickiness".

However, merely capturing a market base isn’t enough. Due to the strong competition faced
in oligopolistic markets, maintaining market power after capturing a strong market base is
equally important.

To do this, certain strategies are used by companies and corporations. They are as follows:

 Patents and Copyrights: Proprietary network technologies are communication

protocols or technologies used in industrial automation or specific device
communications. The owner has full control over the technology, including its
specifications. An example of this in telecom would be the Skype protocol.
 Economies of Scale: Economies of scale are the cost advantages gained by
enterprises due to the scale of their operation. A higher scale of production results in
lower per person costs, being more cost effective towards the company. This provides
and incentive for companies to retain their large customer base.
 Brand Loyalty: Maintaining strong customer retention programs will result in the
development of brand loyalty. Brand loyalty is when a customer feels obliged to
choose a certain product amongst other similar ones due to the value associated to the
brand. This is often observed in brands like Apple, Nike, Coca-Cola, etc. that have
created a loyal customer base due to their high quality products and customer service
and satisfaction.
 Network Effects: Network effects, also known as network externalities, is when more
users increase the value of the network. Social media platforms like Instagram,
Facebook and X (formerly Twitter) increases in value as more and more people use it.
 Government Regulations: Licensing and implementation of anti-trust laws limit new
entrants.
 Location: Service coverage affects competition and pricing.
Another aspect often spoken about in oligopolies is the price discrimination. Price
discrimination is a pricing strategy where sellers charge different prices for the same product
or service to different customers, based on factors like customer characteristics, purchase
quantity, or timing, aiming to maximize profits by capturing more consumer surplus. There
are three types of price discrimination found, namely first degree, second degree and third
degree.

 First-Degree Price Discrimination: In first degree price discrimination, there is

personalized pricing for enterprise clients based on their usage. For example, in the
case of telecom, first degree price discrimination would include offering or auctioning
a unique phone number. This is mostly catered to customers that are comparatively
richer and have a higher consumer surplus, which means they’re willing to pay higher
amounts of money than a regular customer. Due to a higher consumer surplus,
telecom companies often differentiated services and unique phone numbers to this
section.
 Second-Degree Price Discrimination: Second degree price discrimination means
that customers will be charged different prices based on the quantity they purchase.
For example, bulk data plans and prepaid recharge offers. Most telecom companies
offer family plans at much lower prices compared to separate phone plans. For
example, JioPlus Family Plan, Airtel’s Post-paid Plan are some examples of second
degree of price discrimination.
 Third-Degree Price Discrimination: Third degree price discrimination is where a
certain demographic of people are given certain discounts. This demographic can be
calculated off of age, gender, occupation and other such factors. For instance, for
those who have a large price elasticity of demand, companies will charge a lower
price compare to those who have a small price elasticity of demand. For example:
Student Discounts: Cheaper plans for students. Senior Citizen Plans: Special packages
for elderly customers. Corporate Plans: Different pricing for business accounts.
Case Study: Airtel’s segmented pricing model.

Recently, the Telecom Regulatory Authority of India asked Bharti Airtel to publish its
segmented tariff and pricing models offered by the company to its customers. This has been
done to bring clarity to the pricing model used by telecom industries as well as the criteria of
classification of its customers for availing such offers. Additional information such as the
number of subscribers per offer and per region has also been requested. TRAI has stated that
segmented offers have to necessarily transparent and non-arbitrary, either for retention of old
customers or capturing a new market base, and have to be filed with the TRAI transparently
and mandatorily. A potential reason for this could be in compliance with antitrust laws
(which we will be getting to soon.)

“With the tiered approach, services, and needs at different price

points are being met using our partner ecosystem to serve
customers better.”
-Shashwat Sharma, Chief Marketing Officer, Bharti Airtel.

Airtel operates in multiple segments, including wireless services

(mobile), home services (landline & broadband), digital TV, and
business services.

This suggests a broad market segmentation strategy, targeting both

individual consumers (B2C) and enterprises (B2B).

The photo provided on the left gives an account of the services

provided by Airtel for the “home” sector (B2C), which mainly
includes domestic plans like family sharing, family Wi-Fi and data
plans, along with its landline feature. In the graph given below are
it’s ‘earnings before interest, taxes, depreciation and amortisation
(EBITDA)’ in black and its ‘revenue’ in red. We can notice a
decline in both (-11% and -8%), that may be indicating challenges
such as strong competition, pricing pressures or regulatory impacts.
Airtel Business (B2B services) grew in revenue (+10%) but had
a slight EBITDA decline (-4%), suggesting potential cost
pressures despite higher sales, likely due to demand for
enterprise solutions such as network integration, data centres,
and digital media.

Adding one last piece of graphical information, we compare the

impact of Airtel in India and Africa:

Airtel Africa, in contrast, saw strong

growth in both EBITDA (+23%) and
revenues (+12%), highlighting a more
favourable market environment or
pricing power in that region.

Price Discrimination Insights:

1. Regional Pricing Strategies:
o The sharp decline in India’s mobile EBITDA
suggests intense price competition, regulatory
changes, or increased customer acquisition costs.
o Meanwhile, the revenue growth in Africa suggests Airtel is able to charge
relatively higher prices or face lower competition in that market. This
indicates third-degree price discrimination—charging different prices based on
geographical location and market conditions.
2. B2B vs. B2C Pricing:
o Airtel Business services grew in revenue, despite a minor EBITDA decline.
This suggests business clients may be less price-sensitive than individual
consumers, allowing for differential pricing between enterprises and
individual customers.
o B2C segments (mobile, home services) faced EBITDA declines, suggesting
price competition and possibly price wars in consumer markets.
3. Service-Specific Pricing Strategies:
o Mobile services in India are likely highly competitive, leading to lower
margins. This could be due to price caps, promotional discounts, or reliance on
data plans over traditional voice services.
o In contrast, broadband (home services) may not be experiencing as much
competition, yet still shows negative growth—potentially due to high fixed
costs or shifting consumer preferences.
o Airtel’s business services’ revenue growth implies a premium pricing strategy,
possibly due to specialized services like cloud computing and enterprise
mobility solutions.
This brings us to the end of a case study analysis of price discrimination and market
segmentation.

Game Theory in the Telecom Industry.

Game theory offers a valuable framework for analysing strategic decision-making in the
context of the ongoing 5G revolution. The increasing competition among telecommunication
firms to capture market share and accelerate the uptake of 5G technology in the world can be
deciphered through the game theory principles to unravel customer behaviour prediction and
reactions in the market and hence model the complex interplay of all the industry players.

Introduced by economist Oskar Morgenstern and mathematician John von Neumann in the
1940s through their seminal work, Theory of Games and Economic Behaviour, game theory
has found applications in almost every field. Quite simply put, game theory brings structure
to predicting the outcomes of situations in which multiple actors, with competing interests,
make strategic decisions that affect one another.

In the telecommunication sector, with 5G coming into the market, game theory is important
in analysing market dynamics and competitor behaviour. Operators can now:

 Identify rival strategies and assess threats.

 Define target markets and segment offerings.
 Balance internal goals with external competitive pressures.
 Attract top talent and convert customers from rival services.

Beyond that, game theory has also enabled modelling companies in as far as economic
behaviour involving high stakes choices are concerned. With 5G now, telecom operators
would be deciding whether to retire a certain underperforming product or whether to come up
with new ones, modify the sales and marketing strategies, or even change the distribution
channels-all under the consideration of how the competition would respond.

Given the current state of 5G rollout, it becomes essential for firms to apply game theory
when:

 Planning service launches across regions.

 Setting pricing models for 5G data and devices.
 Anticipating competitive threats and responding strategically.

Game theory helps visualize interdependent strategies such that one operator's success will
essentially depend on what the others do. For this to be highly effective, it is necessary to
understand several foundational concepts of game theory.

Key Game Theory Concepts in the Telecom Industry

The following are essential concepts from game theory that are particularly relevant in the 5G
telecom space:
  Game: A strategic setting involving two or more players, where each player’s
decision affects the outcome for others. In telecom, this can relate to pricing wars,
town-by-town 5G launches, promotional campaigns, or negotiations with partners.
 Players: These include telecom companies, consumers, regulators, or decision-
makers. Each has preferences regarding outcomes such as profit, market share, brand
perception, or user base.
 Actions: The possible strategies available to each player. Examples include launching
new plans, adjusting prices, deploying advertising campaigns, or investing in
infrastructure.
 Payoffs: The outcomes each player values—these might be financial (e.g., revenue,
market share) or non-financial (e.g., brand loyalty, customer satisfaction).

Strategic Models in Game Theory

 Nash Equilibrium: A state where no player can unilaterally improve their outcome
by changing their strategy, assuming other players’ strategies remain unchanged. In
telecom, this might represent a stable pricing pattern or market share distribution.
 Prisoner’s Dilemma: A situation where all players would benefit from cooperation,
but individual incentives drive them to defect. For instance, two telecoms might
benefit from stable pricing, but each is tempted to undercut the other to gain short-
term advantage—often resulting in losses for both.
 Dominant Strategy: A strategy that yields the highest payoff for a player, regardless
of what others do. For example, a telecom might decide to price aggressively if its
network speed and coverage provide a competitive edge, making it the best move in
any scenario.
 Mixed Strategy: Involves choosing between strategies based on a probability
distribution. This is useful in unpredictable environments—such as launching
promotions based on customer data or competitor behaviour.
 Coordination Game: A scenario where all players benefit from aligning their actions.
In the telecom industry, this can apply to establishing shared 5G infrastructure
standards or scheduling network rollouts to avoid overcrowding.

These examples show how telecom companies are constantly playing games—not mind
games (well, maybe a little)—but strategic, high-stakes games where every move invites a
counter. Understanding game theory doesn’t just help in hindsight; it empowers firms to
predict competitor behaviour, anticipate market reactions, and take bold but calculated steps.
In the 5G era, where timing, pricing, and innovation are everything, game theory isn’t just
relevant—it’s essential.
Case Study: Jio’s Entry into the Telecom Industry.

Reliance Jio is a telecommunications company and a subsidiary of Jio Platforms that soft-
launched on 27th December, 2015, and became publicly available on 5th September, 2016.
Jio transformed the Indian telecom sector by introducing ultra-affordable 4G data plans,
offering free voice calls, and eliminating roaming charges. Jio’s aggressive pricing
strategy disrupted incumbents like Airtel and Vodafone Idea, leading to a
massive price war. Many telecom operators either shut down or merged
(e.g., Vodafone and Idea).

Let us now create a mock-up game of Jio and Airtel to show case what their strategy and
Nash equilibrium would be. We will break this case down into all the points discusses above
with respect to game theory.

The Players: The players in this mock up game, as discussed before, are Jio and Airtel.

The Game: Both of them offer set of mobile data, Wi-Fi and 5G plan to their customers.
They need to decide their pricing strategies. This decision is not made only based on their
revenue or profit expectations, but is also based on what the other player chooses to do. This
is the very essence of game theory.
The Actions: There are two choices that can be made in this scenario. They can either retain
high prices, which results in premium services, higher ARPU (average revenue per user),
however higher prices may result in loss of customer retention. The other choice is the
opposite: they can choose to lower prices. This offers benefits such as aggressive customer
acquisition and makes market penetration much easier.

The Payoffs: There are multiple outcomes that can be a result of the choices made by both
players, which will be shown in the matrix below:

Each pair displays Jio and Airtel’s revenue payoff for the decisions made by each of them.
We can interpret that:

1. If both of them charge high prices, they both get an equal revenue, sharing the
premium segment. (3,3)
2. If one decides to undercut and lower the prices, they will end up making more
revenue due to more customers, whereas the other will lose their market share. (1,4)
& (4,1)
3. If both of the decide to charge lower prices, they will both get an equal revenue again,
but this time their profit margin is lower, but the customers will be retained. (2,2)

Now we come to the interesting part: What will be the action taken by the players?
Additionally, what will be the result of these actions? And why would the players choose the
action that they did?

Nash Equilibrium: One might expect the Nash Equilibrium to be (3,3) since it makes sense
that both companies would want to earn the higher profits possible. However, that is not the
case. In this situation, the Nash Equilibrium would be (2,2).

A Nash Equilibrium is a situation where no player can improve their own outcome by
changing their strategy unilaterally, assuming the other player sticks to their choice.
Let’s examine whether any player can improve their outcome by switching strategies from
the (2, 2) state:

At (2, 2): Both choose Low Prices

 Airtel's payoff is 2. If Airtel switches to High Prices while Jio stays with Low, Airtel's
payoff becomes 1.
→ This is worse for Airtel.
 Jio’s payoff is 2. If Jio switches to High Prices while Airtel stays with Low, Jio's
payoff becomes 1.
→ Again, worse for Jio.
Since neither player gains by deviating from their current strategy, (2, 2) is stable. Thus, it's
the Nash Equilibrium.

Why Other Outcomes Are Not Nash Equilibria:

At (3, 3): Both choose High Prices

 Airtel could switch to Low Prices and earn 4 instead of 3.
 Jio could also switch and earn 4 if Airtel stays high.
This strategy pair isn’t stable. Both players have an incentive to deviate and undercut.

At (4, 1) or (1, 4):

 The player earning 1 clearly benefits by switching to Low Prices, increasing their
payoff to 2.
Again, not stable—players have an incentive to change strategy.

Conclusion:

The strategy profile (Low Prices, Low Prices) yielding a payoff of (2, 2) is the only Nash
Equilibrium in this game. It may not be the ideal outcome collectively (compared to 3, 3),
but it's the most realistic and stable in a competitive, non-cooperative setting.
This brings us to the end of this case study.

Another aspect that is often spoken about in economics is consumer welfare. Price
discrimination may help producers to a large extent, but oftentimes we find that it may hurt
the consumers on a financial level as well. We now come to the subject of Consumer
Perspective and Welfare Effects

Benefits to Consumers

1. Affordable Access for Price-Sensitive Groups:

o Students, senior citizens, and low-income groups can benefit largely from
telecom services at lower rates due to third-degree price discrimination.
o For example, student SIM plans offer reduced data rates or extra benefits like
OTT subscriptions and unlimited calls at a lower cost, which is helpful as most
students often don’t have any source of income.
2. Customized Plans for Different Levels of Usage:
 o Second-degree price discrimination allows consumers to choose based on how
much data or call time they use.
o Light users can go for basic packs, while heavy users get value for money
through bulk plans. For example, families can opt for family packs which
come at a much lower price instead of getting multiple separate plans for each
individual.
3. Encouragement of Digital Inclusion:
o Regional pricing (lower prices in rural areas) encourages connectivity in
regions that are often separated from urban areas.
o This helps bridge the digital gap by making services more accessible and
facilitate urbanization.

Harms and Limitations

1. Cross-Subsidization – Some Pay More:

o Premium users (usually business users or high-income consumers) often
subsidize the cost for discounted users, which can feel unfair, especially if
they don’t get proportionally better service.
2. Inaccessible or Complicated Plans:
o Too many pricing options may confuse customers and lead them to pick plans
that don’t align with their best interests.
o Consumers may unknowingly pay more due to lack of clarity or understanding
of better-suited packages.
3. Geographic Disparities:
o Urban users might pay more for the same service just because their area has
higher demand, despite lower cost of provision due to better infrastructure.

Consumer Surplus Impact

 Consumer Surplus refers to the difference between what a consumer is willing to

pay and what they actually pay.
 High surplus for users who get discounts or promotional pricing. For example, a
student who is willing to pay ₹500 for a data plan gets it for ₹300.
 Low or negative surplus for those paying more than average without corresponding
benefits. For example, a business customer paying ₹1,200 for a similar plan that
includes services they may not use.

Ethical Concerns in Pricing

1. Lack of Transparency:
o Many telecom providers do not clearly disclose why different customers are
charged differently.
o Hidden terms, expiry of promotional rates, or auto-renewals lead to distrust.
2. Disguised Discrimination:
o Sometimes, segmentation appears neutral but ends up discriminating indirectly
(regional pricing might align with socioeconomic status).
 3. Data Privacy Issues:
o For first-degree or dynamic pricing, firms may use personal data to determine
how much you're willing to pay—raising ethical and legal questions around
consent and fairness.
4. Digital Literacy Gaps:
o Less tech-savvy users (like some older citizens) may be unable to navigate
plans and end up overpaying due to the often confusing set of plans that
companies overwhelm consumers with.

While price discrimination in telecom can enhance consumer welfare for specific groups and
expand access, it can also unintentionally harm or exploit uninformed consumers. The key
lies in transparent pricing, ethical use of data, and consumer awareness and education to
ensure fairness and inclusivity.

Now that we have spoken about consumer welfare and ethical concerns on how price
discrimination may harm consumers, as much as it benefits them, let’s come to the
regulatory aspect, and see how governments hold companies in check. In oligopolies, the
chances of companies forming cartels and forming collusions is very high, which puts
consumers at a strong disadvantage. There are measures taken by the government to
ensure fair pricing through antitrust laws.

1. Regulations: Government Policies on Fair Pricing

Telecom pricing in oligopolistic markets is regulated by national telecom authorities to

prevent exploitation of consumers and ensure competitive practices. In India, the Telecom
Regulatory Authority of India (TRAI) plays a key role. It ensures:

 Tariff transparency.
 Prevention of discriminatory pricing.
 Protection of consumer rights.

The TRAI mandates operators to report pricing schemes, offer uniform tariffs, and ensure
justified differentiation across customer segments. All companies have to be transparent
about their price discrimination policies to the consumers as well as the TRAI.

2. Antitrust Laws: Preventing Market Abuse

Antitrust laws aim to restrict:

 Predatory pricing: Deliberately undercutting prices to eliminate competitors.

 Collusion: Price-fixing or informal agreements to avoid competition.
 Dominance abuse: Using market power to set unfair prices.

In India, the Competition Commission of India (CCI) monitors these aspects under the
Competition Act, 2002. Globally, similar roles are held by bodies like the Federal Trade
Commission (FTC) in the U.S. or the European Commission's Directorate-General for
Competition.

For telecom, antitrust rules prevent one firm from using unfair pricing (like extreme discounts
or tie-in bundles) to squeeze out smaller players, which is something Jio was accused of
doing during its market entry phase.

3. Notable Cases: Lawsuits Related to Unfair Practices

 Jio vs. Airtel Pricing Battle (India): Jio’s disruptive entry with free services in 2016
led to complaints from competitors (Airtel, Vodafone) to TRAI and CCI. They argued
predatory pricing, but the CCI ruled in Jio’s favour due to its “new entrant” status.
 EU vs. Qualcomm: The EU fined Qualcomm €997 million for using rebates and
discounts to Apple in exchange for exclusive use of its silicon chips, which was seen
as abuse of dominance
 AT&T–Time Warner Merger (U.S.): Sparked debate around market power and
consumer pricing control after vertical integration. Vertical integration is a business
strategy where a company expands its operations to control multiple stages of its
supply chain, often from raw materials to finished product. This poses the threat of
potential monopolies arising.

These cases highlight how regulatory oversight is essential to balance competition and
innovation.

Conclusion and Recommendations

1. Effectiveness

Price discrimination, when implemented legally and ethically, allows firms to:

 Maximize revenue.
 Segment markets efficiently.
 Offer customized services to different income groups.

In the telecom industry, it enables wide accessibility. Lower-income consumers access basic
services in an affordable manner, while higher paying users pay more for exclusive features.
However, in oligopolies, this strategy may turn exploitative without proper checks.

2. Improvements: Transparency in Pricing Strategies

 Firms must disclose why and how prices differ.

 Avoid hidden charges or complex terms.
 Policies like TRAI’s order on transparency are steps in the right direction but need
stricter enforcement.

For example, Airtel or Jio offering different plans based on geography should be clearly
explained.
3. Competitor Response: Tailored Pricing to Retain Customers

In oligopolies, when one player (like Jio) introduces disruptive pricing:

 Others respond with cashbacks, bundled services, and region-specific discounts.

 This keeps churn rates low and enhances consumer choice, but risks a race to the
bottom without profitability.

Airtel’s tailored pricing in Africa versus India is a good case — adapting plans based on
income levels, ARPU (Average Revenue Per User), and popularity of different smartphones
in different regions.

4. Policy Implications

Policymakers must:

 Promote competition while preventing unfair price targeting

 Define clear rules for permissible discrimination

Balancing fair pricing and competitive strategy is key. Complete price uniformity isn’t ideal,
but neither is uncontrolled segmentation that harms consumer welfare.

Modern markets are significantly shaped by oligopolies, especially in sectors like

telecommunications that demand substantial investments in infrastructure and technological
innovation. Oligopolies, which are defined by limited competition among a small number of
powerful companies, promote interdependence, strategic conduct, and innovation-driven
expansion. They do, however, also carry the potential of diminished consumer welfare, price
control, and market manipulation.

We notice how companies like Jio and Airtel have navigated through this environment in the
telecom industry by offering customized services, aggressive pricing, and differentiation.
Price discrimination raises questions about transparency, fairness, and ethical boundaries
even while it helps businesses maximize revenues and serve a variety of customer bases.

Effective regulation—through bodies like TRAI and the Competition Commission—is

essential to ensure that oligopolistic firms do not abuse their market power. The current
situation calls for a well-rounded strategy that protects consumer rights while encouraging
innovation. The goal is to enable these businesses to compete fairly, set responsible prices,
and support inclusive digital growth as technology, as well as competition, evolves.
 References
Bharti Airtel. (2024). Integrated report and financial statements 2023–24. Bharti Airtel.
https://assets.airtel.in/static-assets/cms/investor/docs/annual_results_2023_24/
Integrated_Report_and_Financial_Statements.pdf

Investopedia. (n.d.). Oligopoly definition.

https://www.investopedia.com/terms/o/oligopoly.asp

Investopedia. (n.d.). What are some current examples of oligopolies?

https://www.investopedia.com/ask/answers/121514/what-are-some-current-examples-
oligopolies.asp

Kumar, V. (2019). Price discrimination as a marketing strategy. ResearchGate.

https://www.researchgate.net/publication/336131174_Price_Discrimination_as_a_Marketing
_Strategy

Number Analytics. (2021, September 30). The deep impact of price discrimination in
markets. https://www.numberanalytics.com/blog/the-deep-impact-of-price-discrimination-in-
markets

Parikh, N. (n.d.). Jio game: Understanding strategies using game theory. LinkedIn.
https://www.linkedin.com/pulse/jio-game-understanding-strategies-using-theory-nisarg-
parikh

Sage Knowledge. (n.d.). The Airtel–Jio battle: The limitations of game theory.
https://sk.sagepub.com/dict/mono/game-sutra/chpt/14-airtel-jio-battle-the-limitations-game-
theory

Titus, R. (2021). Consumer responses to price discrimination: An experimental investigation.

Journal of Retailing and Consumer Services, 61, 102520.
https://doi.org/10.1016/j.jretconser.2021.102520

Indian Institute of Management Ranchi. (2021). Price discrimination in the Indian telecom
sector. Micro Economics. https://www.studocu.com/in/document/indian-institute-of-
management-ranchi/micro-economics/price-discrimination-in-the-indian-telecom-sector/
19459447

Parikh, N. (2019). The Jio game: Understanding strategies using game theory. LinkedIn.
https://www.linkedin.com/pulse/jio-game-understanding-strategies-using-theory-nisarg-
parikh

Sage Knowledge. (n.d.). The Airtel–Jio battle: The limitations of game theory. In Game
Sutra. https://sk.sagepub.com/dict/mono/game-sutra/chpt/14-airtel-jio-battle-the-limitations-
game-theory

Number Analytics. (2021, September 30). The deep impact of price discrimination in
markets. https://www.numberanalytics.com/blog/the-deep-impact-of-price-discrimination-in-
markets

Econsultancy. (2013, March 28). What is price discrimination and is it ethical?

https://econsultancy.com/what-is-price-discrimination-and-is-it-ethical