Competition Safeguards Section 1

Contents of module

• Competition
  • Introduction
  • Terminology
  • Basic Principles
  • Competition Requirements
  • Competition Laws
  • The Regulator’s Role
  • Complaints
  • Mergers, Acquisitions and Investments
  • Miscellaneous Issues
  • Appendix I
  • Appendix II
  
  
• eLearning main Index

Section 1: Introduction

It is now widely recognised that competition is a major factor in a country’s economic development. When competition is allowed to grow in a well-functioning market, it has the effect of increasing efficiency, reducing prices, increasing innovation, widening supply and promoting better customer service. When these improvements occur across all industries in a country, the overall effect is to raise that country’s economic performance very significantly.

This has particular reference to telecommunications (or telecoms, for short). Whereas some level of competition is normal in most industries, telecoms was (and often still is) monopolised by one company. Therefore, in telecoms the introduction of competition requires a complete re-orientation of the industry, and that is not easy to do.

Furthermore, as a result of technological change, telecoms has become a key industry, not just in its own right but also in its role in supporting every other industry. Therefore, it is of major significance to a country that introducing competition into telecoms is accomplished in a satisfactory manner so that the country can maximise the potential benefits.

Competition does not develop just because it is the community’s wish that this should happen¹. There are many hurdles to overcome. The situation must be managed firmly but carefully if the process is to take place in a satisfactory manner. Most countries establish a ‘regulator’ whose job it is to manage the change. It is the regulator’s role in introducing competition, and specifically in introducing competition into the telecoms industry, that is the focus of this module.

Aims Of This Module

The aims of this module are:

• to examine various aspects of the introduction and expansion of competition in the telecoms sector;
• to identify the areas of specific concern;
• to present possible means by which these areas of concern may be ddressed; and
• to relate the issues to a specific environment (namely Hong Kong) which is used as a case study.

What This Module Contains

As noted above, this module is concerned with the regulator’s role in introducing and encouraging the growth of competition in the telecoms industry.

It should be made clear at the outset that there is no formula to follow in managing the process. Every environment is different, and sensitivity to the local context is essential. At the same time, some concepts have general application, and these are included in the materials.

In many respects, introducing competition into the telecoms industry has features in common to the same process segments of the economy. At the same time, there are a number of differences. Again, the materials make clear where special circumstances apply to the telecoms industry.

How to Study the Module

This module is designed for self-study. It can be pursued at a pace that is suitable to the learner’s own personal circumstances. It is not subject to deadlines or any tutors’ demands.

A set of questions is provided at the end of the module. You are advised to answer these questions to make sure that the concepts covered have been properly assimilated. A target score is shown. For a lower score than the target set, it is recommended that the material in the module be reviewed.

National Pro-Competition Bodies

It is worth mentioning again that there is no single method by which competition can be introduced into any industry, particularly one as diverse as telecoms. This should not be taken to imply that what other countries are doing in this respect is irrelevant. Indeed, the opposite is true. Because there is no set formula, it is necessary to gain as much information as possible from the successes (and failures) in other countries if an intelligent and informed approach is to be adopted elsewhere.

Consequently, this module makes reference to a wide range of materials that illustrate practical examples of points being made in the materials. Some of the regulatory bodies referred to are contained in Appendix I.