Long before the world has greatly shifted to modernization, telecommunications is regarded to be exclusive for the rich ones. Now that we have come to a time when telecomm is being considered a necessity to each one of us, operators are also growing in number.
Telecommunications have been considered one of the driving factors why technology is being adapted nowadays. With the growing network of social media which cater to individuals of any age, telecommunications is in great demand.
Since the last review of telecommunications competition a decade ago, the gap between two companies can be as big as 10% in any given provider in any given country. Nowadays, companies succeed side by side, with services almost the same as the other. The competition has been so preeminent that analysts fear it can overpower the quality of services and customer satisfaction.
The impact of penetration of any operator in major cities depends on the service it offers. It is a rare phenomenon to only have one telecomm provider for a certain city. Since the market demands it, other operators are trying to offer their own service overlapping each other.
Say for example, telecommunications competition in Indonesia, one of the biggest in the world with mobile phones doubling the archipelago’s population which is the fourth largest in the world. The three largest competitors are Telkomsel, Indosat and XL Axiata. The latter has recently been affiliated with Axis Capital Group, the leading mobile provider in the country. This move by Axiata was faced with complaints from fellow competitors as they create an edge with the subscribers in Jakarta and almost all of Java, Sumatra and Bali. Telkomsel shadowed the advantage by offering almost similar promos in internet surfing and messaging.
Similar promos are not the only challenge and issue faced in fierce competition.
A mismatch in the structure of access prices relative to final prices has given rise to a number of competition concerns. Traditionally access prices have been based predominantly on “perminute” charges. As retail prices have moved towards a “flat rate” or non-usage sensitive charges, competitors have complained that they cannot compete, especially in the market for Internet services. The solution is to ensure that any forms of price-discrimination that are present in retail prices are matched in access prices.
Competition authorities have also addressed a large number of concentrations in the telecommunications sector, as newly liberalized companies seek to restructure and to expand into related markets such as Internet service provision, cable television provision or even content services such as Internet or multimedia content.
