Q:
Jio is a big shot at reducing the cost of Internet access in India. The U.S., despite being the richest country in the world, lags far behind in terms of cost and penetration of Internet access. Cheap access to the Internet is an important step in bridging the access gap – access to good education, good healthcare, etc. But the market reaction to Jio is similar to the U.S. market’s reaction to firms announcing their intention to diversify.
(A) The final group of losers is the current shareholders of RIL. On announcement of Jio, the stock price of RIL fell.
(B) It shows that the market’s short-term reaction is usually proven correct in the long-run.
(C) On losing end, the first groups of losers are the shareholders of other telecom companies.
(D) The large amount of revenue the Government of India gets from auctioning off the nation’s natural resources is not necessarily a good thing because the Government does not have a stellar track record when it comes to spending the money. A large fraction of Government spending is wasted.
(E) The second loser is the Government of India. The big money the Indian Government was raking in selling cellular bandwidth was actually coming from the pockets of the cellular consumers.
(F) The first obvious winners of this scheme are customers.
(G) The second winner is Mr. Ambani; he can potentially make a lasting impact as the man who brought Internet to millions of Indians.
Question:
Which of the following supports the decision of other companies opposing Reliance JIO Scheme?
Answer & Explanation
Answer: D) Both C & E
Explanation: As the arguments C and E states that other companies are on the losing end with this scheme, it is the only appropriate answer to this question.
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