competition Archives — Page 3 of 4 — LIRNEasia

It’s been a few weeks since this presentation, developed on the basis of work Tahani Iqbal did while she was at LIRNEasia. It had one piece missing, the importance of timing. This was pointed out by my colleague M. Aslam Hayat. If MNP is introduced when a new and hungry entrant comes into the market, it could make a difference.

Why telecom privatization is good

Posted on May 10, 2013  /  3 Comments

Sri Lanka and Pakistan partially privatized their incumbent fixed telecom operators more or less at the same time competition was introduced. India, Bangladesh and Nepal did not. Bad move. The lumbering monsters could not compete. The sad state of the Indian incumbents who have been fed more subsidies than it is possible to imagine is thus described.

What mobile means to search

Posted on January 8, 2013  /  1 Comments

We were early in talking about mobile being the principal vehicle for Internet access. The continuing discussion about the FTC terminating the investigation of Google has some detailed discussion on how search is being shaken up by mobile: Nowhere has technology changed as rapidly and consumer behavior as broadly. As people abandon desktop computers for mobile ones, existing tech companies’ business models are being upended and new companies are blooming. “Mobile is very much a moving target,” said Herbert Hovenkamp, a professor of antitrust law at the University of Iowa who has been a paid adviser to Google. “This is a market in which new competitors come in a week’s time.
I entered the policy and regulation space through an unusual door: the AT&T Divestiture Case of the early 1980s. There the evidence of consumer harm was clear to all: Lily Tomlin had seen to that. That was not the case with Google. “The way they managed to escape it is through a barrage of not only political officials but also academics aligned against doing very much in this particular case,” said Herbert Hovenkamp, a professor of antitrust law at the University of Iowa who has worked as a paid adviser to Google in the past. “The first sign of a bad antitrust case is lack of consumer harm, and there just was not any consumer harm emerging in this very long investigation.
Increasingly, there is talk that permitting Huawei to bid on telecom network contracts makes a country vulnerable to espionage and worse. The Economist has a well argued ripost. Well worth a read. The other reason for not banning Huawei is the dirty little secret that its foreign rivals strangely neglect to mention: just about everybody makes telecoms equipment in China these days. Chinese manufacturers and designers have become an integral part of the global telecoms supply chain.
Vertical integration has been a no-no. The advantages of specialization (sticking to one’s knitting) have been emphasized. And now, Microsoft moves into hardware. That, in turn, has limited their ability to take the kinds of risks on hardware innovation that have helped define the iPad. Furthermore, with the iPad, Apple has proved that there are significant advantages to designing hardware and software together.
The Wall Street Journal reports that legislative action is required for permitting competition in Myanmar telecom market: Officials have enacted an investment law with guarantees against nationalization and have proposed tax reform. However, these don’t go far enough. The state still controls the most lucrative industries, since a 1989 law restricts private enterprise in oil and gas, mining and telecom. This makes it imperative that the retrograde ITU sponsored draft law be thrown out and a piece of legislation appropriate for the 21st century be adopted.
We predicted the spread the BTN model from Asia to Africa. We saw the duopoly structure in Latin America preventing its spread to that continent. We really didn’t say much about Europe, except in passing. But it looks like the issuance of a fourth license in France (we did not even know France had only three operators! How backward!

Good Google? Bad Google?

Posted on September 22, 2011  /  2 Comments

My entry to telecom policy and regulation was through the AT&T Divestiture case, where the US Department of Justice broke up the world’s largest company with my advisor, Bill Melody, as a key witness. The good guys and the bad guys were clear. While I was teaching the big Microsoft antitrust case came up and Lessig was appointed as Master to assist the judge. The lines were not as clear, but I could see the leveraging of the operation system being problematic. Google’s case is much harder to take a position on.
On several occasions, I had stated that the mobile industry HHI in India was lower than the US Department of Justice threshold for all industries. The Obama people had revised it to 2500 in 2010. That means that most S Asian telecom industries are below the threshold. The Justice Department has officially used HHI since 1982, and the guidelines were revised by the Obama administration in 2010. Mr.
At the opening, Sunil Bharti Mittal had announced that Airtel was raising prices. And I was the lead on the panel of tariff regulation on the second day. I was ready for fireworks, but it was sedate. Only spark was on why roaming prices were not regulated. I first talked about where prices levels were: South Asia with the lowest prices for voice (Bangladesh was the cheapest, though many Indians insist they are).
Auction design is hot. The Economist reports on 4G auction design in the UK: The government will want to squeeze as much revenue as it can from the sell-off, but it must also preserve competition in a consolidating industry. The recent merger of Orange and T-Mobile has left Britain with four mobile-phone operators: Everything Everywhere (the imperious name for the newly merged company), Vodafone, O2 and Three. That is a healthy number compared with some countries, such as America, where AT&T’s proposed acquisition of T-Mobile USA would create what some regard as, in effect, a duopoly. But Three warns that it would struggle in an unrestrained bidding war with its larger rivals for the new spectrum.
My response to incessant complaints in the region about profits disappearing and investment drying up because of excessive licensing has been to say that liberal and transparent market entry policies must be accompanied by clearly stated exit policies that are consistently enforced. I have also pointed out that in many South Asian markets the levels of competition, as measured by the HHI, are relatively higher than in the US and that what applies in S Asian markets does not necessarily apply in N American markets and vice versa. In this light, it is worth tracking what happens to the AT&T acquisition of T Mobile. AT&T customers, though, could benefit in one notable area: service. Both AT&T and T-Mobile operate on the same technology, known as GSM, so the combination should provide better coverage.

Can a market support another operator?

Posted on February 22, 2011  /  7 Comments

I was asked today by a reporter whether the Sri Lanka market could support another entrant. I answered, but wasn’t sure it would be carried accurately. Therefore, here is the answer. The market should determine the number of suppliers in a market, not government officials. This requires two things: (1) an orderly policy on market exit, whereby, for example, suppliers have clear rules on what can be done about the assigned spectrum, existing customers, and so on; and (2) transparent license and renewal procedures that allow for as many licenses to be issued as possible within the constraints of spectrum.

Doing telecom business in China

Posted on February 16, 2011  /  7 Comments

Talk about coincidence. Just yesterday, on the train to Brussels, I just finished answering a series of questions sent by Voice & Data, the leading ICT industry publication in South Asia. This included a question on whether it would be possible for Indian telcos to do business in China. My answer was “China is a market that is still heavily controlled by the government. I see possibilities for Indian equipment/software/apps suppliers to enter, but believe it is premature to think of Indian operators entering the Chinese market like they have entered African or South Asian markets.
How many Internet providers does your country have? If five your government can do a Mubarak. However many you have, if they all go through one or two choke points as in Bangladesh, easy. The big lesson of Egypt may be less the danger of overmighty government than what it shows about how national authorities can (and can’t) close down the internet. The authorities there simply told internet service providers (ISPs) to switch off their computers.