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Thursday, 29 December 2011

Unit 3: Duopoly, regulation and market failure!

Setback for Etisalat and du network-sharing plan


 
 
Click here to access an excellent piece from the National, on etisalat and du, our favourite two network providers here in Dubai. You all know that we pay a high price for not a very good service. This is a clear example of how high entry barriers cause market failure and the exploitation of  the consumer.
 
We do have our very own government watchdog here in UAE, the Telecommunications Regulatory Authority (TRA).
 
Questions to consider:
 
What is the market structure of the UAE netwrok providers?
 
How will the fixed line sharing initiative help consumers?
 
Will it, in your opinion, help the producers (as the article suggests)? If so, how?
 
Does the delay of the agreement suggest 'Regulatory Capture'? (What is this?)
 
When the agreement to share lines is eventually complete, how will the producers now compete, discuss one price and one non price strategy!
 
I would like to see some comments to the above questions before the end of the holidays!
 
thanks all

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