competition Archives — Page 4 of 4 — LIRNEasia

Today at the IITCOE workshop Ashok Jhunjhunwala made a strong argument that the Indian government must hive off the backhaul networks of BSNL and have them be managed by a separate company. Interestingly Masayoshi Son, the Japanese entrepreneur has made more or less the same argument in Japan. Great minds think alike. The government is expected shortly to unveil a scheme to loop the country with fibre-optic lines that will support internet access at up to 100 megabytes a second, ten times the speed of the technology being replaced. Mr Son argues that to guarantee fair access to this network—and thus the most efficient use of it—it should be run by an infrastructure firm hived off from NTT, owned jointly by all the telecoms operators.
Most people do not associate telecenters with the United States. That’s because they are called public libraries there. The Economist reports that more people are coming to the American telecenters because critical government and other services are increasingly available only through the web and because some people have dropped home connections in the hard times of the Great Recession. The best way for America to ease the new strain on its libraries is by closing the digital divide; companies and state agencies are unlikely ever to give up the efficiencies they won by moving online. Around $7 billion of 2009’s stimulus went to expand broadband access.
It started with something innocuous. Within a very short period of around a week all the mobile operators in Pakistan announced they would charge 10 Paise for balance inquiries. The Competition Commission of Pakistan naturally initiated an inquiry. The mobile operators said there was no price fixing and that this move was intended to reduce the overuse of this service. But then someone turned up with copies of emails showing the existence of a CEO Forum and details on discussions of prices, not only for balance inquiries, but for other services as well.
In addition to giving the keynote at the OECD/infoDev workshop on the Budget Telecom Network Mode at the IGF in Sharm el Sheikh, I attended several sessions, one being that on reducing interconnection costs. The key recommendations seemed to cluster around two actions, creating Internet Exchanges in each country and reducing leased line costs by introducing competition and breaking incumbent control on essential facilities such as cable stations. Our findings from countries that have had working Internet Exchanges at various times such as Bangladesh, Indonesia and Sri Lanka show that their effects fluctuate (there is an unfortunate tendency of internal dissension in these things) and that getting leased line prices (both domestic and international) down is, on balance, more important. That unless the leased-line problem is not solved, the good work done on Internet Exchanges will be washed out. There is an assumption that every country should have an IX.
New Zealand’s Commerce Commission has won a high court battle against Telecom NZ, with the court agreeing that the operator abused its market power to deter competition. The Auckland High Court held that Telecom charged disproportionately high rates for wholesale access to its data transmission access lines during the period between 2001 and 2004. This action – which was a breach of New Zealand’s Commerce Act – prevented ISPs from offering competitive retail prices for high-speed data services. Telecom’s wholesale charges were often higher than its retail prices during this period, the court found. The court found that Telecom aimed to deny competitors access at prices that would allow them to develop their own data transmission networks.
Full participation in the global Internet Economy requires electronic connectivity of considerable complexity. Today, due to a worldwide wave of liberalization and technological and business innovations in the mobile space, much of the world is electronically connected, albeit not at the levels that would fully support participation in the global Internet Economy. Yet, many millions of poor people are engaging in tasks normally associated with the Internet such as information retrieval, payments and remote computing using relatively simple mobiles. Understanding the business model that enabled impressive gains in voice connectivity as well as the beginnings of more-than-voice applications over mobiles is important not only because widespread broadband access among the poor is likely to be achieved by extending this model but because it would be the basis of coherent and efficacious policy and regulatory responses… This is an excerpt from a background report by Rohan Samarajiva, to be presented at “Policy coherence in the application of information and communication technologies for development,” a joint workshop organized by the Organisation for Economic Co-operation and Development (OECD) and the Information for Development Program (infoDev) / World Bank from 10-11 September 2009 in Paris. The report has been published in the OECD’s Development […]
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.
Unlike in Asia, the price of an individual SMS has increased by 100% to USD 0.20 in the US.  This has happened at the same time as the mobile market consolidated from six suppliers to four.  Naturally, there has been public-policy concern.  In defense of the telecos, it must be noted that most people in the US do not pay on a per-message basis, but get a “bucket” of services including a large number of SMS for a fixed price, so the per-message price is really not relevant to most people.