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Need of regulation
Public Monopoly
Private Monopoly
Partial Competition
Full Competition
1:Limited Regulation because government is the sole monopoly operator and the regulator itself
2:Increase in regulation because the private operator needs to know its rights and obligations and the
government needs a regulatory framework to facilitate oversight over the monopoly operator
3:Greater need for regulation as regulator must implement tools to foster and sustain a new
competitive market (e.g. rules regarding potential anti-competitive practices, licensing frameworks,
setting tariffs, universal service)
4:Decrease in regulation as competitive market largely regulates itself, representing a shift to ex - post
regulation
Structural Independence :
structurally independent regulator that separates the function of regulating the
telecommunication
market from that of supplying services. Providing a regulator with structural independence
reduces the possibility of political or industry capture
Functionality :
functionality is predicated on a combination of elements such as well-defined functions and
responsibilities
Financial:
the funding sources and budgeting processes of regulatory authorities also can have an
important impact on their independence, efficiency and the cost of regulation
is the vehicle to ensure credible market entry, as well as compliance with and enforcement of existing
regulations. To achieve this, governments must create and maintain an environment conducive to good
governance and regulatory success
Forms of Competition
1: Perfect Competition : is an ideal model of a competitive market, but is
unlikely to occur in practice
Perfect competition requires a number of conditions:
The product concerned must be homogeneous that is to say, the
product must have identical attributes and quality regardless of who buys
or sells it
There must be a large number of buyers and sellers for that product
Buyers must be homogeneous and perfectly informed
There must be no economies of scale
There must be no economies of scope
There must be no regulation of the market or franchise obligations
There must be no restrictions on capital.
Buyers have access to alternative sellers for the products they desire
(or for reasonable substitutes) at prices they are willing to pay
Sellers have access to buyers for their products without undue
hindrance or restraint from other firms
The market price of a product is determined by the interaction of
consumers and firms
Differences in prices charged by different firms (and paid by different
consumers) reflect only differences in cost or product quality/attributes
3: Sustainable Competition
Market definition
From the point of view of consumers (whether they are functionally equivalent);
From the point of view of suppliers (the ease with which firms not already supplying the
product or service in question can start doing so).
Product
Geographic
Functional
Temporal
Customer
Market power has been defined as:The ability of a firm to raise prices above competitive levels,
without promptly losing a substantial portion of its business to existing rivals or firms that
become rivals as a result of the price increase.
Licensing Objectives
Privatization or commercialization;
Expansion of networks and services and other universal service objectives; Regulating
provision of an essential public service;
Consumer protection;
Regulatory certainty.
License types
1. Individual authorizations;