In the course of her research on India’s telecom policy and regulatory environment, LIRNEasia Senior Research Fellow Payal Malik calculated the HHIs for different circles in India and found them to be very low. Drawing on other TRE research and the literature, she has made a comparative assessment of the level of competition in India and a prognostication on the direction of mobile tariffs in an interview with the Economic Times.
Lirneasia’s senior research fellow Payal Malik had published the Herfindahl-Hirschman Index (HHI) – the index for market concentration – in the telecom markets of South Asian countries, last year. Lower the HHI, higher the competitiveness in a market.
India’s turned out to be the lowest at 2000, as compared to Indonesia’s 3400 and Thailand’s 3900. Among the western markets, USA’s stood at 2529 and UK’s at 2309. In fact, India’s competitiveness is close to the US anti-trust guidelines’ threshold for market trustworthiness – a HHI between 1000 and 1800.
“With that level of competition, the assumption that price cut by one telco will be followed suit by all its counterparts in the market is valid,” Ms.Malik said. “So, it can be expected that RComm’s move will mark yet another nosedive in our mobile tariffs.”
4 Comments
Absent
Any Idea about HHI in Sri Lanka ?
Helani Galpaya
According to LIRNEasia’s 2008 TRE research on Sri Lanka (conducted by Malathy Knight John of the Institute of Policy Studies)the HHI (based on subscriber market share) was 0.30 (3000) at the end of 2007. According to Malathy’s paper, level of competition is improving, since the HHI was 0.36 (or 3600) in 2006.
Absent
Thanks for the info. It would be interesting to see the picture at the year end of 2008 with the intense price competition.
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