Maxis, Digi and Celcom are three big telecommunication firms. Telecommunication
firm in Malaysia such as Maxis, Digi, Celcom has very powerful competition
within themselves. This article reflected oligopoly. Oligopoly is a market
where there are only a few competitors. Oligopoly exists when the firms have to
consider the reactions of the other competitor in setting its price policy.
Maxis, Digi, Celcom and other telecommunication firms set very high
entry barriers to entry exist such as copyrighted, economics of scales and
others. However, they are mutual independent with each other over controlling
price. Their industries are so small that each telecommunication firm has to
depend on advertising, marketing, special offer, packaging and many other
factors except playing around with their price. Other than that, Malaysia
telecommunication firms also faced dilemma on to choose whether to compete or
to cooperate with rival firms. If they decide to cooperate, a larger monopoly
can be formed and they can enjoy monopoly profit.
In my opinion, Malaysia telecommunication firms should cooperate
together so they can provide better service to consumers.
References
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Done by :
Teo Zijien 0315574
Teo Zijien 0315574
What is the purpose of the oligopoly? If they were to cooperate with each other. How are they going to become better?
ReplyDeleteThe purpose of oligopoly is to allow the firms to set a price to maximize their profit. If they were to cooperate with each other, it will allow them to maximize their profit and will push their services to a whole new level.
Deletewhy do all the firms always stick to the same existing price level?
ReplyDeleteSo that they can avoid a price war. Firms will compete on other factors rather than price. It is known as non-price competition.
DeleteWhy do firms set very high entry barriers?
ReplyDeleteThe firms set high barriers so that only potential firms can enter the industry. It also can prevent others from entering market to capture excess profits.
DeleteIf all these 3 telecommunication firms combine together and provide services for the Malaysians, wouldn't it be a new form of monopoly? They have the tendency to charge the consumers at a high price but just providing moderate services to them.
ReplyDeleteTalking about the three main telco firms combine to provide a better service to consumer. In real fact, once they combine then they will become monopoly. Eventually, they can actually provide worst service at a higher price because the consumer has no choice but to use it. I do believe that competitions make them improve and also stop them from charging at a high price because they can't just charge a higher price while their competitor offer a lower price. Someone do agree with me do you not?
ReplyDeleteI agree with you
Delete