Dissertation Proposal:Telecommunication Industries in the UK
The telecommunication networks in the early days of their invention in the UK were government-owned monopolies. Since the deregulations in the telecommunication market in the late 1980s, several telecom providers have sprouted in the UK. The network providers were considered natural monopolies like the other utilities such as water and power. In this type of monopoly, only one company was mandated to supply running cable networks, and switches, which routed the calls. Due to the massive benefits to various businesses and consumers, the telecommunication industry has attracted competition from various suppliers in the industry. Major telecom suppliers in the UK include British Telecom (BT), Vodafone, Everything Everywhere (EE), TalkTalk, Virgin, Three UK, O2, Giffgaff, Sky Mobile, and Tesco Mobile. The suppliers have ensured the market of telecommunication supplies in the UK is highly competitive thus informing the dissertation topic: The effects of the competition of the UK large suppliers on the market price of the telecommunication industry and how to avoid and prevent the biggest supplier on monopolizing the market.
The Effects of Competition of the UK’s large Telecommunication Suppliers
The entrance of new technology, and competitors in the telecom network provision has put the telecommunication industry in a period of upheaval. The competition seeks to reduce the effects of the long-term market incumbent providers and create a stimulating business environment, which reduces monopoly (Martins & Andrés, 2010). The dissertation will look into several effects of such competitions and the possible means of reducing any possible monopoly. Don't use plagiarised sources.Get your custom essay just from $11/page
Flexible financial deals
Due to competition among the UK’s telecommunication suppliers, Telecom Plus arrived at a financial deal with RWE Npower. In this deal, Telecom Plus will buy subsidiaries from the RWE Npower to enhance completion in the domestic market and earn Telecom added competitive advantages financially. Telecom Plus will take the ownership of about 770,000 customer accounts at a deal of £219m. The dissertation will look into the financial details of this deal, and determine whether there will be a likelihood of Telecom Plus monopolizing the market.
Complex Tariffs
The dissertation will look at the issues surrounding the technological evolution regarding tariffs due to competition among the providers. Tariffs in the UK are becoming increasingly complex, making it difficult for consumers to identify the provider who offers the best value in the market. The complexity on the tariff structure makes it difficult to determine the overall cost of the service hence the market prices may not be adjusted accordingly by the providers. The consumers are also in the mix-up for determining the best service provider in terms of the tariffs.
Increased fixed voice services
As competition among the providers heightens, the market price for the fixed voice services is also affected. The focus on competition among the telecommunication firms in the UK has shifted towards bundled services. The fixed line rental prices have increased in the UK market for the past decade (Martins & Andrés, 2010). Due to competition, the providers have used the rental line to subvert the declining usage revenues even there is a decline in the underlying wholesale cost. The service providers offering the purchase of the standalone landline services have accrued disproportionate price fluctuations. There are more effects which the dissertation will take into consideration regarding the market prices of the fixed voice services for various providers.
Increased sophistication on price discounting for bundled services
There is an increasingly sophisticated use of price discounting, which targets new consumers with discounts in the UK. Some of the service providers in the UK offer discounts to existing consumers as a means of outdoing the other firms in the market. Nevertheless, the dissertation will recognize that some of the consumers do not benefit from such competition. The market prices of the bundled services are also affected.
The other effects of such completion on the market price include new products in the market, which give the consumers a wide range of choices for flexibility purposes. The market prices must also adjust to accommodate varied consumer choices (Kim et al, 2011). Due to completion, many consumers in the market would upgrade their broadband at no additional cost. The market price for such upgrades has thus been scrapped off as opposed to a monopolistic environment. The competition among the service providers has also increased the out-of-bundle call prices. The effects as mentioned earlier will be subject to in-depth analysis by their impact on the market price.
Preventing Monopoly
Reviewing the financial aspects of broadband pricing
The telecom watchdogs in the UK launched the review of broadband prices among the active providers in the UK. The paper will thus look into the financial effects of reducing the broadband prices among the active suppliers, and whether the financial considerations of the consumers will lead into another spree of market monopoly.
Awarding Government Approved Licenses to the Providers
One way in which companies in the telecommunication field gain a competitive advantage over their competitors is the lack of certifications of equal weight (Hawley, 2015). The government may recognize a single provider, and award almost tender to the company, thus creating a monopolistic environment. If licenses are granted to several provider companies, they will be able to compete effectively in the market.
Price Control Mechanisms
Price control mechanisms protect the consumers while ensuring the telecommunication company remains viable, and has incentives for efficient operation. Price control prohibits the overexploitation of the consumers (Kim et al, 2011). Each of the providers will then review their pricing strategies to match the regulations for price control. The method will guard against price discrimination, and predatory pricing too.
Creating a favorable investment climate
The efforts to reduce monopolistic competitions among the telecommunication providers are not entirely the work of the federal government. The dissertation will look at this aspect of creating a favorable investment climate from the element of the firms themselves (Hawley, 2015). These firms engage in activities, which weaken the work environment relationships among the employees, and the employers. The paper will look at how each of the large firms within the UK has managed to create a conducive environment for effective competition in the market of telecommunication.
Narrowing the innovation gaps
The levels of innovations can gauge a competitive telecommunication industry, and the developments it has done to ensure effective communication for the consumers. Narrowed innovation gaps are devoid of monopoly.
Conclusion
This dissertation will look at the broader scope of the telecommunication industry in the UK, and the effects of the competitions among the provider firms. Regarding this, the paper will look at the impact of the competition of the UK large suppliers on the market price of the telecommunication industry and how to avoid and prevent the biggest supplier on monopolizing the market. The complexity of the tariffs, fixed-rate services, the price discounts of the bundled services has been identified as the significant effects on the market price. Preventing monopoly in such environments will call for narrowing the innovation gaps, awarding approved licenses of equal weights to the firms, creating an enabling environment, and price control mechanisms have been identified as the methods of curbing monopoly among the telecommunication firms.
References
Hawley, E. W. (2015). The New Deal and the problem of monopoly. Princeton University Press.
Kim, K. K., Ryoo, S. Y., & Jung, M. D. (2011). Inter-organizational information systems visibility in buyer–supplier relationships: the case of telecommunication equipment component manufacturing industry. Omega, 39(6), 667-676.
Martins, M. L. C., & Andrés, A. R. (2010). The global digital divide revisited (2000-2004). In Workshop on the Economics of ICTs, Porto, Portugal: Centro de Economia e Financas da Universidade de Porto.