Competition and Oligopoly in Telecoms

Competition and oligopoly in
telecommunications industry
in the EU

Vítor Santos

ovitorsantos@hotmail.com

COMPETITION AND OLIGOPOLY IN TELECOMMUNICATIONS INDUSTRY IN THE EU 2

TABLE OF CONTENTS

Index of Tables ..................................................................................................................2

Introduction .......................................................................................................................3

Competitiveness ................................................................................................................4

Oligopoly ...........................................................................................................................5

European regulations in the telecommunications sector ...................................................6

Application of sector specific rules ..........................................................................7

Regulation of the telecommunications market .........................................................8

Concepts underlying the regulation of telecommunications

From competition to monopoly................................................................................9

Barriers to entry......................................................................................................10

The definition of a regulatory sector ...............................................................................10

Issues to tackle .................................................................................................................12

Deduction from the analysis of telecommunications regulation .....................................14

The oligopoly of telecommunications .............................................................................14

Case study

The Portuguese case ............................................................................................... 15

European Union .....................................................................................................16

Conclusion .......................................................................................................................17

Bibliography ....................................................................................................................18

INDEX OF TABLES

Table 1 - The Oligopoly in the telecommunications sector in the European Union .......16

MICROECONOMICS ADVANCED  UNIVERSITY OF ORADEA


INTRODUCTION

This work arose in the course of Advanced Microeconomics taught by Ms. Prof.
Dr. Alina Badulescu at the University of Oradea.
The work focuses on the telecommunications market, through market analysis and
study of oligopolistic characteristics.
In fact, their characteristics, the mobile telecommunications market is
characterized by an oligopoly. This kind of market does not compete with each other at
European level, but within each country, where the composition of the market is
dominated by a small group of companies to ensure distribution of the service market.
The description of this work begins with a sense of competitiveness, which from
my point of view is important because it depends on the market, and results in better
organized, better results through to the consumer.
How could it not be, is a short introductory presentation described the concept of
oligopoly, which will be developed throughout the work.
In the following it is shown how the EU regulates the telecommunications market
through measures to regulate the market, owing to possible domain markets, it
developed specific rules for this sector, bearing in mind that this is a market
characterized by oligopoly.
The European Union also attempts to resolve, through its regulations, some faults
that are felt in the telecommunications market in Europe.
Finally is presented a case study of an oligopolistic sector in the
telecommunications market, the case of Portugal where the market is dominated by
three large companies, which somehow reflects the more European Union countries,
which are characterized in this sector, few companies dominate the market, and hence
be seen as an Oligopoly.



COMPETITIVENESS

It is said that a given industry is highly competitive when the various companies that
comprise it have conditions and similar resources in the search for spaces on the market
competing more evenly among themselves. On the other hand, the industry may have a low
competitiveness, showing that few companies have the resources and conditions
highlighted, while other companies have few resources, featuring a lopsided contest.
Competitiveness can be somehow expressed for market share achieved by any firm in
a market in a certain moment in time (Possas 1999) 1. Market share expresses how much a
particular company has sales or revenue out of the total sales or revenues realized for a
given market. For the analysis of competition in the telecommunications industry, the use of
this concept is relevant, since the market share achieved by a particular firm expresses its
ability to gain customers and revenue within the industry.
However, Possas (1999) considers the market share in an indicator of the success
achieved by a particular firm in the past. Therefore, it is necessary to better assess the
potential that a company has to achieve consistent results in the future. For this, Possas
(1999) suggests an internal review of the firm when seeking to understand their strategic
choices that affect their market share. That is, how market share is a historical fact and,
therefore, refers to the past, it is necessary to understand the strategy of organizations to
try to predict their behavior and therefore its ability to maintain participation.
Concomitantly, Kupfer and Hasenclever (2002)2 present the competitiveness and
efficiency achieved by the company in competition, as it reflects its ability to
differentiate themselves from competitors. Efficient firms are more capable of offering
distinctive products and services to the market than its competitors, meaning more
likely to maintain their market shares.
It is possible verify that exists a correlation between the concepts of
competitiveness, market share and strategic choices of companies. This follows from
the fact that is the choices and strategic actions and way of how a company operates in
the market that will determine your sales, revenue and market share. Thus, one way to
assess the competitiveness of a firm is to check their market share while we observe the

1
POSSAS, S. 1999. Competition and competitiveness: note about strategy and selective dynamic on capitalist
economy. São Paulo, Hucitec.
2
KUPFER, D. and HASENCLEVER, L. 2002. Industrial Economics: theoretical and practice in Brazil. Rio de
Janeiro, Campus



intrinsic characteristics of the organization that contribute toward achieving that result.
Kupfer and Hasenclever (2002, p. 3) present a summary of this concept:

[...] Competitiveness was defined as the ability of the company
formulates and implements competitive strategies, which enable it to
expand or maintain, in a lasting one sustainable market position.

Following this line of reasoning, it is important that decisions and strategic actions
of a firm should be in line with the competitive practices of other competitors. That is,
the firm should make strategic choices consistent with the competitive dynamics of the
market, because, otherwise, could be moved further than the market expects in terms of
supply. Possas (1999) supports this statement by pointing out that the competitive
dimensions are related to market characteristics.
Brand, production process, internal management, knowledge of people, customer
relations, among others, are examples of resources and expertise that an organization
may have as a source of competitive advantage. For Grant (1991)3, the resources and
skills, as mentioned earlier, are the basis for company’s profitability.
For Porter (1981)4, industrial organization has important contributions to the
determination of strategy in that it uses market analysis to devise strategies to deal with
the forces driving the industry.

OLIGOPOLY

An oligopoly corresponds to a market structure of imperfect competition,
characterized by the fact that the market is dominated by a small number of producers
so that one company alone has any power to influence the price as well. In an oligopoly,
the products produced can be homogeneous or show any differentiation being that,
generally, the competition is in the highest levels of factors such as quality, customer
service, loyalty or image, rather than to the price level.

3
GRANT, R.M. 1991. The resource-based theory of competitive advantage: implications for strategy
formulation. California Management Review
4
PORTER, M.E. 1981. The contributions of industrial organization to strategic management. Academy of
Management



An important feature of oligopoly is that they are in sectors with high barriers to
entry, whether the high entry costs, the existence of a minimum scale of very high
efficiency, the existence of strong economies of experience, legal limitations, or others.
Oligopolies are common, we can find them in the communications sector, where entry
barriers are high.
An evolutionary trend oligopolies is for oligopolies collusion (or cartel), in which
the oligopolists organize themselves and jointly make decisions about the supply and
prices. In situations of the cartel, prices and quantities traded in the market tend to catch
up with prices and quantities that occur in a monopoly situation. Usually, this kind of
practice is illegal under the antitrust laws because of adverse effects on the economy
and giving rise to the damage it brings to consumers.

EUROPEAN REGULATIONS IN THE TELECOMMUNICATIONS SECTOR

The European Parliament voted on the "telecoms package", which aims to
improve the existing legislation relating to electronic communications services and
establish a new European telecommunications regulator body. This reform is aimed at
enhancing competition, widening the choice for users, increase the transparency of
tariffs and contractual conditions, to facilitate access for people with disabilities and
protect consumers' personal data.
European citizens should enjoy, regardless of where they live and wherever they
travel in the EU, communications services more efficient and less costly, whether they
use mobile phones, broadband connections to the Internet or cable television.
Proposals for reform of EU rules on telecommunications, presented by the
Commission in November 2007 and on which Parliament legislates on an equal footing
with the Council, provide new rights for consumers, such as change of operator
telecommunications within a day, offering more consumer choice through more
competition between operators, promoting investment into new communication
infrastructures, in particular by freeing radio spectrum for broadband services, wireless,
and increased reliability and network security through new tools for fighting spam,
viruses and other cyber attacks.



Apart from the distribution of UMTS5 licenses and issues related to sharing of
infrastructure, which are still being discussed in some European countries, the following
topics on mobile communications are on the agenda of national regulators and the
European Union, and must be outlined here for a summary: the first number portability,
which is an important prerequisite for a competitive market, since it reduces commuting
costs second, international roaming, the third mobile termination charges that are
considered too high and the fourth Mobile Virtual Network Operators, who need access
to mobile operators' infrastructure, which refers to the general issue of interconnection
in the mobile telecommunications market.
The international mobile roaming charges are high on the agenda of DG
Competition of the European Commission and national regulatory authorities since
January 2000. Unannounced inspections were conducted by the European Commission
in July 2001, nine European mobile operators in the UK and Germany in order to find
out if there are bees with collective fixing of retail prices or illegally fixed wholesale
prices charged to pressure operators. Another competitive international roaming rates
appears to be weak since the charges are high and static and operators are suspected of
exploiting the lack of customer awareness about these roaming charges. This is true for
the mobile operator's customer is traveling the country as well as for the home network
operator, which usually adds a margin of 10 to 25 cents per minute. High prices for
international roaming is a problem very similar to mobile termination rates. In most
cases those who ask for termination of international roaming also requires the regulation
of mobile termination rates.

APPLICATION OF SECTOR SPECIFIC RULES

Public intervention through sector specific regulation is closely linked to the
concept of utility based on the notion that a company be "clothed with a public interest."
Even though the line between public services and other sectors is a shadow area, which
can be defined as a core industries in which "the first guarantee of acceptable
performance is not designed to be competitive or self-restraint but the government
controls direct".

5
Universal Mobile Telecommunications System



Public utilities often involve conditions where a private monopoly, public
monopoly or public regulation appear, or appear for a long time, the only viable
alternatives for the structure of the industry.
Permits are issued for example for the operation of mobile telecommunications
networks, leading to restrictions on the entry. Access problems are also seen as such, if
competitors have access to facilities owned by other companies, therefore, price
controls are among the most common instruments of regulation and can take many
forms.

REGULATION OF THE TELECOMMUNICATIONS MARKET

The European Union was the driving force in the liberalization of European
telecommunications markets and promoted the development of mobile services since
1980. However, it was in 1994 that the first time, the European Union promoted a
coherent policy framework for the entire mobile sector to open it to competition. The
1994 Green Paper proposals for positions on the licensing conditions for operators of
mobile networks. The proposed framework would mainly rely on what was at that time
the telecommunications policy of the European Union that it had to be applied to the
mobile sector.
Under the amendment of ONP6 Framework Directive in 1997, an additional
directive dealing specifically with issues of interconnection has been introduced, which
plays a significant role in terms of regulation for MVNOs7 and termination charges. The
Interconnection Directive requires all operators providing publicly available telephone
services to negotiate interconnection with each other, if requested by another operator.
More important is that it requires mobile operators in the national interconnection
market to offer cost-orientated interconnection, which is a severe intervention in the
market and in the center of discussion. SMP8 is generally presumed when an operator
has more than a market share of 25% in the relevant market, however the National
Regulatory Authorities (NRAs)9 are flexible and can decide on SMP independently of
market share data. As for the economic regulation is the concept of SMP and its
consequences for the interconnection and pricing issues that are the most important
basis for the regulation of mobile telecommunications markets in Europe.

6
Open Network Provision
7
Mobile Virtual Network Operator
8
Significant Market Power
9
National Regulatory Authority



CONCEPTS UNDERLYING THE REGULATION OF TELECOMMUNICATIONS

FROM COMPETITION TO MONOPOLY

There is a competition that is believed to give companies stronger incentives to
offer customers what they want on prices and quality products. Finally, innovation is
promoted through competition, as it offers companies the opportunity for short term
gains. A monopoly, in contrast to a competitive market occurs and can be kept under
three conditions: first, the market is occupied by a single seller, the second replacement
of the product is not possible because similar products are not available enough, and last
entry market this product is limited by substantial barriers and exit is difficult. There are
many possible reasons for the existence of monopolies and they are all listed as barriers
to entry. A firm with monopoly power may choose to produce at any point on the curve
of market demand, ie it can set the price and consequently reduce production or vice
versa.
A case that is connected to the case of monopoly is the case of oligopoly that is a
model of market behavior that falls between monopoly and perfect competition.
Oligopolies refer to markets with an extremely limited number of companies operating.
Oligopoly theory and not particularly distinguished coalition of collusion between the
companies. Attempts by economists to describe and model oligopolistic markets have
generated a series of theories, none of which became a standard or can claim universal
applicability. Often the net effects of welfare under oligopoly remain unclear.
Imperfect information is an important issue, because only through sufficient information
customers are able to evaluate competing products and make rational decisions. In the
telecommunications sector this is particularly important, since different rates can create
an environment in which consumers get to the point of not knowing how much they will
pay for services.
Switching costs are a potential source of market distortion. In many markets (and
particularly in previously monopolistic markets like the telecommunications market),
consumers who purchased a certain product has switching costs for the product of a
competitor, even if it is identical or slightly better. While there are different categories
of switching costs, transaction costs of switching suppliers (to cancel a contract, change
of phone number, etc.) and research costs seeking alternatives most relevant to the
telecommunications market.



BARRIERS TO ENTRY

Barriers to entry are considered the most important reason why markets are not
contestable and are usually the reason why markets become monopolies. They form an
important structural feature of the industry. Examples are the barriers to entry the
absolute cost advantages of incumbent firms (eg, knowledge of a technique of low-cost
production), economies of scale and product differentiation as entry barriers for
potential competitors. The ownership of resources, patents, exclusive franchises from
the government or even unique managerial talent can also be barriers to entry.
Due to the need to sink for example, costs for advertising, new entrants are faced
with additional costs higher than the historical that has already committed its resources.
The risk of losing funds unrecoverable can indeed be increased by the incumbent's
threat of retaliatory strategic or tactical responses. Thus, a potential candidate requires
additional revenue expected to be offset by an increase in incremental costs and risk.
This allows the incumbent to win a corresponding income. Thus, barriers to entry
supernormal profits, inefficiencies, cross-subsidies and the prices can not ideal. Can
inhibit the work of the invisible hand and have negative consequences for the well-
being.

THE DEFINITION OF A REGULATORY SECTOR

There has been an intense debate under way in the world to regulate the sector
makes sense. The creation of regulatory bodies, therefore, is very controversial in many
countries. Besides the general fear of regulatory activity to be captured, a number of
other arguments have been made against economic regulation and in favor of relying on
competition law. It is argued that the sector regulators have a natural tendency to
perpetuate and expand the fields of activity, which of course increases the costs of
regulation to an improper value. Also, firms are suspected of playing "a game of tactics,
with different statuses and authority that makes the costs resulting from the dual
application of both general competition law and sector specific regulation. Another
question is whether regulatory authorities will really have easy access to knowledge and
experience gained by the cartel office with similar constellations of market in other
branches, which significantly affects the quality of decisions being made.



Effects of regulation on innovation are considered negative. The regulation is
supposed to stifle investment and risk, because this rulemaking postpone the rapid
deployment of new technologies, they may sometimes have little incentive to innovate
because of preference strategies become less attractive. Also they may be afraid to be
unduly regulated in the future, making innovation a risky expensive affair. It is also an
argument against the sector-specific regulation that regulators can not rely on economic
theory as a basis for decisions to intervene in many cases it is absent or very difficult to
apply in practice. This is particularly detrimental to price regulation, which has a
significant impact on markets, but due to the complexity of the matter is not always well
matched. Thus, the regulation substitutes individual judgments and judicial decisions
for the aggregation of information effectively and accurately than the competition
effectively.
People feel in telecommunications markets that can still be a need for prior
regulations to clearly define an environment conducive to the emergence of
competition, not only retrospectively apply remedies to punish unlawful conduct. In
market surveillance and decisions on issues such as interconnection and quality of
service can only be granted by a regulatory authority. One key issue, mandatory access
to the markets always lead to price regulation. But in most cases, competition
authorities are not sector specific skills and expertise needed to deal with issues not
afford, often make the needed constant supervision, for example, and termination rates
are still quite slower in the reaction of regulators, so that these issues are normally not
part of their task.
So many authors argue that:
”It will be long time before the evolution of competition in
telecommunications reaches the point where competition law alone is
sufficient.(…). The desire, if not impatience, of competition law policy-
makers to shift telecommunications regulation onto more familiar
ground may indeed cause them to disregard the time and effort required
for telecommunications competition to take hold.” 10

10
See Waters et a. (2000), p. 739. Experiences in New Zealand have proven how difficult it is to ensure
competition in the absence of regulation and demonstrate how reluctant courts can be in getting involved in
technical yet crucial details. See Laffont; Tirole



Telecommunications services often require the combination of several elements.
Long distance calls to the flow of sample through the local loop, switches and
transmission facilities between offices, as well as through the lines of the long distance
company in the middle of the trunk.
The inefficiency of a monopoly to coincide with a protected market where
producers can produce inefficiently, because no real competition (natural monopoly), or
potential competition (due to high barriers to entry of the stranded costs, which does not
would exit the market without significant losses) are a threat. The monopolist can
prevent potential competitors from competing not only on the market (monopoly)
primary but also in adjacent complementary to that potential entrants do not have
access, because the monopolist has no incentive to provide it in commercial terms.

ISSUES TO TACKLE

Charges for terminating calls on mobile networks are currently one of the most
crucial issues facing regulators in Europe. Call termination refers to the final completion
of calls on a network, and in this case refers calls to mobile phones or the completion of
calls on mobile networks that originate in other fixed or mobile networks. The
termination fee is a wholesale charge paid by the operator on whose network the call
originates to the network operator when the call ends. The retail price paid by callers to
a call from one network to a mobile network is largely composed of two components:
one, the cost of the first operator of origin and make the call, and two, the termination
fee paid by the first operator to the second terminating operator. The latter strongly
affects the retail price and it gets to between 40 and 65% of retail price for calls from
one network to another mobile network. Termination charges are on average as high as
18.16 Cent in the European Union is about ten times the average rate for fixed-fixed
interconnection. And even if the cost structures of mobile networks are different from
those in fixed networks, a difference of this magnitude is difficult to explain. Therefore,
it seems that mobile operators can set prices on their networks call termination without
significant competitive pressure.
Traders and consumers are directly affected by the issue of termination charges.
termination charges above cost and unbridled competition normal operators make profit
unduly from their business. Consumers suffer directly from the high termination
charges, because they pay much to call mobile phones in relation to costs for operators,



so that eventually the income is transferred from consumers to the operators. Operators
say they are adjusting their prices and that termination charges are therefore consistent
with economic efficiency and in the best interest of the client. This implies that
consumers are reimbursed for the high termination charges through the benefits
generally low retail prices and complete package of mobile phone, even if the operators
of market power over termination charges. It also implies that the global players do not
generate profit rather than in a competitive market and are exposed to competitive
pressure on the entire package of mobile services.
Each fixed-mobile call subsidizes mobile phone users. This is even more serious
since a market research indicates that those who do not have mobile phones are usually
low-income families. This problem will only be reduced by increasing the penetration
rate of mobile phones.
In the process of developing the new regulatory framework the issue of
termination charges almost lead to a severe crisis when one of the committees of the
Parliament accepted proposals for compulsory regulation of prices based on costs to be
imposed on international roaming and mobile termination rates, including explicitly in
the new Interconnection Directive. However, it did not accept the proposed amendment
out of fear too many regulations on the market.
In several European countries (France, Ireland), some operators have been known
to enjoy SMP in the national interconnection market. Obligations of cost orientation
imposed on these operators for termination charges. In the UK, although SMP is not
designed for mobile operators, Oftel uses the power of competition to impose controls
on fares for all operators and has launched a proposed takeover of termination rates until
2006, through amendment of licenses mobile operators.
Based on evidence that the market for termination charges is a monopolist, and
that due to lack of vendor competition have the power to set prices as a result, the
control of the termination rates to lower prices for consumers seems appropriate and is
also recommended by most experts and committees that have worked on the subject.



DEDUCTION FROM THE ANALYSIS OF TELECOMMUNICATIONS REGULATION

Should be taken into account, however, that the dynamics of the
telecommunications markets in terms of growth and competitive development and
technology seem to make it impossible to provide a final statement on the matter. All
kinds of factors that can hardly be evaluated today may influence the situation. So
although it is now difficult to imagine how it could develop a real competition, experts
agree that it is necessary to reassess the situation on a regular basis to see if the market
or technological developments have changed the situation.
Considering the measures necessary to ensure competitive prices, it seems
inevitable that a regulatory agency is responsible for controlling prices. Price regulation
is a very complex issue and requires ongoing supervision and dealing with carriers.
Regulations based on concepts of market power, such as the concept of PMS
flexibility in deciding when and when not to regulate. Although this flexibility of the
course can be interpreted as a source of easy to manipulate discretion is essential to
have, since the telecommunications market is developing dynamically. This is even
more important at European level.

THE OLIGOPOLY OF TELECOMMUNICATIONS

Clearly, the mobile telecommunications market is not a monopoly. Due to the
number of licenses in different countries, is a naturally oligopolistic market. The cost
functions are considered as a form of economies of scale, but only to a certain extent,
thus enabling all existing players to survive.
There is broad consensus that 4-5 players should be sufficient to generate
sufficient competition in the market.
But some regulators are uncomfortable with the limited number of operators and
the environment of oligopoly, from the beginning, with little chance of expanding the
number of operators. In his view, an oligopoly does not provide sufficient competition
in itself.
Three competitors having three different infrastructures in an oligopoly situation
could theoretically still provide for adequate competition
Exit the market is so expensive (loss of license) that nobody will leave, no matter
how low prices. Anticipating this, nobody starts a price war. In such a scenario UMTS



operators will probably also increase the barriers to entry remaining competitive
pressure.
Considering the potential market entry, more factors must be taken into account.
The infrastructure for mobile telecommunications is characterized by a cost function
with strong economies of scale with a growing number of customers.
Competition in services will enable consumers to make an even greater value on
the more common, since it involves more likely to complement smart service offerings
and services. This can develop to be a major barrier to entry in itself. But the resulting
positive feedback to the operators also implies that there will be no reduction in
marginal costs and economies of scale, for example because of the improvement of
cooperation between operators and service providers with a growing number of service
offerings.

CASE STUDIES

THE PORTUGUESE CASE

In Western Europe, the infrastructure sector has undergone radical change since
the liberalization process began over 20 years. Contrary to what happened, the decisions
on investments in innovation and public infrastructure now reflect the actual
competition, innovation and performance: the case of mobile telecommunications
Portuguese characteristics of network industries: barriers to entry, the exit barriers,
economies of scale, economies of scope, irreversibility and high risk. Hence the natural
tendency to oligopoly. The infrastructure companies now operate in a market context,
under operating conditions laid down by government policy enforced by regulators.
However, these markets, the networks have become an integral part of complex
structures with high value added businesses, in which each agent tends to optimize the
own position in the interest of its shareholders.
The constant and intense technological change today is a fundamental variable in
the analysis of the relationship between differentiation, innovation and efficiency, i.e.
the key vectors that articulate and define the behavior and strategy in oligopolistic
context.



The year 1995 already showed an explosive growth market: Telecel had 177,360
customers and TMN 152,105. Indeed, this feature remains the most obvious Portuguese
telecommunications market.
The third mobile operator - Optimus - licensed in 1997, was characterized by an
entry with an aggressive strategy focused on low prices, causing an almost immediate
reaction of the two competing reaction also focused on reducing prices.
In a first analysis, the entry of a third element in the existing duopoly has proved a
benefit for consumers: keeping, apparently, the same quality of service, the price
decrease was indeed substantial.
The regulatory authority for telecommunications in Portugal - Anacom - attributes
to the three national mobile operators Significant Market Power, a quality that brings
the fulfillment of a set of obligations. Among these three players are required to make
several cuts in termination rates for fixed-mobile by 2006 in order to harmonize the
prices in Portugal with the rest of Europe.

EUROPEAN UNION

The Portuguese case here's an example of what happens in Europe, the
telecommunications sector.
As can be seen in Table 1, the telecommunications sector in the countries shown
as an example is dominated by a small group of companies representing the entire
sector. Thus, it is clear that this sector is characterized by an oligopoly in other
European countries.

Table 1 :: The Oligopoly in the telecommunications sector in the European Union, an example of some countries
Tim O2
AMC Vento Meteoro, 3
Albânia Vodafone
Italy 3
Ireland Móbil de Tesco
Vodafone Vodafone
O2
KPN
Czech T- Móvel Vai o Móbil
Vodafone
Netherlands T-Móbil Malta Vodafone
Répúblic Vodafone
U: fon
T- Móvel
Vodafone
Vodafone KKT Cell
Germany E-Mais
Cyprus KKTC Telsim 2 Turkey Turkcell
Avea
O2
Cosmote Orange O2
Vento Cosmote United Vodafone
Greece Q-Telecom
Romania Móbil de Zapp T-Móbil
kingdom
Vodafone Vodafone Orange, 3
Movistar
T-Móvel Vodafone (Telecel)
Orange
Hungary Pannon Spain Yoigo
Portugal TMN
Vodafone Optimus
Vodafone



CONCLUSION

The telecommunications market is a market where exponential growth when
viewed from a European perspective. In Europe, there are 79 mobile network operators.
Is usually characterized as an oligopoly, the European Commission is obliged to
implement regulatory measures so that there is an abuse of market power, which would
translate into higher costs for consumers.
It is important to be aware of possible strategies for small business groups that
dominate the market, so they do not result in familiar situations such as cartels in which
this group of companies established between itself and that in turn set prices and
measures that are not advantageous to consumers.
This way, is fundamental to the European Union to intervene with its rules, hence
the emphasis in this work that gave the rules of EU regulation. In an increasingly
competitive market, customers have the possibility to switch to an operator who can
best fit the profile of its demand, forcing companies to increase productivity and reduce
prices.
Regarding the situation of the sector across the EU, the European Commission
said that it considers have been denied to consumers and businesses as well as the
European Union as a whole, the full economic benefits that would result from a single
telecoms market and competitive real due to the inconsistent enforcement of the sector.
This work had interest for me, since, despite the concept of oligopoly is not new
to me, the market for telecommunications was something they had never sought to
know so badly. Thus, resulted in new knowledge for me.



BIBLIOGRAPHY

 http://www.twobirds.com/English/News/Articles/Pages/Assessment_of_smp_in_French_electroni
c_communications_markets.aspx

 http://www.market-analysis.co.uk/PDF/Topical/HarbordHoernigMerger20AUGUST2010.pdf

 http://groups.haas.berkeley.edu/fcsuit/Pdf-papers/Regulation-Landgrebe.pdf

 http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+IM-
PRESS+20080923IPR37898+0+DOC+XML+V0//PT

 http://www.anacom.pt/

 http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/215&format=HTML&aged=0&l
anguage=PT&guiLanguage=en

 http://ec.europa.eu/enterprise/sectors/rtte/index_pt.htm

 NATIONAL COMMUNICATIONS AUTHORITY (ANACOM). Statistical data on mobile
communications. Portugal: Anacom, 2003

 Samuelson, Paul A., 2005 Economics, McGraw-Hill


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