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When a subscriber of one telecom operator calls another subs

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When a subscriber of one telecom operator calls another subs

by BTGmoderatorDC » Sun Mar 03, 2019 9:05 pm

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When a subscriber of one telecom operator calls another subscriber of different telecom operator, the destination telecom company (of the receiving subscriber) charges a small connection fee to the originating telecom operator. In Country Y, this connection fee, which is charged on a per minute basis, is stipulated by the regulator and thus, is same for every telecom operator.

Recently, in country Y, several new telecom operators have entered the market and almost all of them are enticing customers by charging much lower call rates than are charged by the existing operators. Since connection fee is one of the sources of revenue for new companies, the regulator should increase the connection fee so that the financials of the new telecom operators improve and thereby, they are able to better compete in the market.

1.Select a statement below which provides the strongest reason to suggest that the recommendation of the author would have the opposite effect than as envisaged.
A. The connection fee is such a small component of revenues of any telecom companies that no company could survive by just relying on this.
B. In the past, whenever regulator has been advised a course of action by an outside agency, the regulator has taken a completely opposite action step.
C. The financial health of a telecom company is determined by the total profits generated by the company, irrespective of the source of revenues.
D. Due to highly competitive call rates, the number of outgoing calls from an average user of a new telecom company is expected to be much greater than the number of incoming calls.
E. Increase in the connection fee may be passed on by the companies to the end users, which may make consumers switch their existing telecom company.

OA D

Source: e-GMAT
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by deloitte247 » Sat Mar 16, 2019 12:02 am

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OPTION A:- INCORRECT
This implies that the connection fee is not very much needed if is a small component of the revenue and cannot serve as a means to which the opposite of the authors recommendations will be fulfilled, because its main importance has been defeated.
The argument focuses more on the connection fee as the main source of revenue but this option opposes this fact and if the connection fees is reduce according to the authors recommendation, the finance of the telecommunication company have a higher chance of increasing otherwise.

OPTION B:- INCORRECT
The fact that it happened that way in the past doesn't have much influence in the current situation and doesn't serve as a means to which the opposite of the authors recommendation will be fulfilled.

OPTION C:- INCORRECT
This implies that special attention won't be given to connection fee as a source of revenue for the company as well as shows the relevance of the argument.

OPTION D:- CORRECT
If the author's recommendation is put to work and the connection fee is increased, the number of outgoing calls of a new telecom user is expected to be greater than the incoming calls to improve their finance because if it proves otherwise it means that there will be no improvement in their finance as well as no competition in the telecommunication market which happens to be the the opposite of the author's recommendation.

OPTION E:- INCORRECT
This doesn't serve as a reason for the opposite of the author's recommendation because the increment in the connection fee will help to improve finance.
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by deloitte247 » Sat Mar 16, 2019 12:02 am

Timer

00:00

Your Answer

A

B

C

D

E

Global Stats

OPTION A:- INCORRECT
This implies that the connection fee is not very much needed if is a small component of the revenue and cannot serve as a means to which the opposite of the authors recommendations will be fulfilled, because its main importance has been defeated.
The argument focuses more on the connection fee as the main source of revenue but this option opposes this fact and if the connection fees is reduce according to the authors recommendation, the finance of the telecommunication company have a higher chance of increasing otherwise.

OPTION B:- INCORRECT
The fact that it happened that way in the past doesn't have much influence in the current situation and doesn't serve as a means to which the opposite of the authors recommendation will be fulfilled.

OPTION C:- INCORRECT
This implies that special attention won't be given to connection fee as a source of revenue for the company as well as shows the relevance of the argument.

OPTION D:- CORRECT
If the author's recommendation is put to work and the connection fee is increased, the number of outgoing calls of a new telecom user is expected to be greater than the incoming calls to improve their finance because if it proves otherwise it means that there will be no improvement in their finance as well as no competition in the telecommunication market which happens to be the the opposite of the author's recommendation.

OPTION E:- INCORRECT
This doesn't serve as a reason for the opposite of the author's recommendation because the increment in the connection fee will help to improve finance.
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