Reliance followed an aggressive pricing strategy in a bid to improve sales and increase its market share

Reliance Infocomm – The Question of Ethics

Reliance followed an aggressive pricing strategy in a bid to improve sales and increase its market share

The caselet starts with a brief introduction of CDMA and GSM operators in India. It then focuses on Reliance’s foray into the telecom sector and its aggressive pricing strategies, aimed at developing a substantial customer base. This caselet discusses the hidden costs in these strategies that mislead the customer. The caselet also describes incidents where the company was found guilty of violating licensing norms.

Issues:

» Regulatory issues in cellular services


» Impact of unethical practices


» Pricing strategies of cellular operators

Introduction

The two technologies for mobile phones are GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access). CDMA is popular in the US and South Korea while GSM had a widespread network in Europe and Asia. In India, Airtel, Idea, Hutch, and MTNL (Mahanagar Telephone Nigam Limited) offered GSM technology. Tata Indicom, started in 2001, was the only company that used CDMA technology until Reliance Infocomm Limited (Reliance), began operations on December 28, 2002…

Questions for Discussion:

  1. Reliance followed an aggressive pricing strategy in a bid to improve sales and increase its market share. What were the effects of these strategies both on the company and customers? 

 

  1. “Reliance has deviated from established norms on more than one occasion.” Explain. Do you think Reliance had acted as a socially responsible organization?

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