The Reform Context of China's Telecommunications Industry

The Reform Context of China's Telecommunications Industry

  • Submitted By: bayerndd
  • Date Submitted: 04/29/2010 10:42 PM
  • Category: Business
  • Words: 267
  • Page: 2
  • Views: 540

This essay aims at introducing the reforms context of China’s telecommunications industry and analyzing the market features for both monopoly and Oligopolies markets. It is generally recognized that China’s telecommunications industry has undergone three extensive reforms so far. The first happened in 1994, when a second telecommunications service company, China Unicom, was established to break the monopoly situation controlled by China Telecom for long. Then in 2002, China Telecom was further divided into four companies, so there formed two duopoly markets in fixed-line service and mobile service domains respectively. With the coming of 3G era and under the growing pressure of international competition following accession to the WTO, the China’s telecommunications industry experienced the third reformation in 2008. At last, three new companies survive of the fittest and each of them has a fixed-line and a mobile phone business as a result of mergers and divestitures. This essay focuses on the analysis of monopoly market before 1994 and duopoly market after 2002 in China’s telecommunications industry. Some theories, such as price discrimination, game theory, will be introduced to help explaining the telecommunications market rules and the government policies. The Chinese government is always dedicating to the introduction of competition in telecommunications industry, and the introduction of competition is not for the competition itself, but in order to better meet consumer demand in the potential market, but competition can not eliminate monopoly. A full market competition will also cause monopoly. To some extent, the political strategy requires implement control over the industries that are the life-blood of the national economy.

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