Research On The Theory And Demonstration Of Price Regulation In Telecommunications Industry Of China

With the reform and opening, the telecom industry in China has outgrown its GDP by 3 times for more than the past decade, and become the major contributor to Chinese ever growing economy. At the same time, the price of the telecom service becomes a focus. According to the Basic Telecom Agreement of the WTO, the Chinese government should open up its telecom market entirely since 2007. The Chinese telecom service market is in a more competitive situation, and the unprecedented challenge is brought to price regulation. Under the above circumstances, this paper intends to focus on the theory and demonstration research of price regulation in telecom industry of China.Firstly, this dissertation studies the characteristics of telecom industry and the market structure of Chinese telecom service competition, which is the basic of studying telecom price. Secondly, it discusses the theory and methods of price regulation, comparing the models of foreign telecom price regulation. Then, the paper studies the course of price regulation revolution in Chinese telecom industry and the present models of price regulation. After that, a demonstration research is made on Chinese telecom price regulation, based on 1114 pieces of paper in Chinese telecom service market from 2003 to 2005. At last, some advice on Chinese telecom price regulation is given.Though the method of grey relevance analysis, this paper showed that the revenue has the biggest influence on Chinese telecom enterprise's CAPEX, which indicates A-J effect in public regulation.By studying the Concentration and Herfindahl Index, this paper found that the market structure of Chinese telecom service competition is still oligarch monopoly. The study showed that, it is more possible for new entrants to break up the price alliance than incumbents. As the depreciation does not affect on the quotient of incumbents notablely or the gross profit of the industry is small, incumbents will provide a price umbrella for new entrants. The study showed that, in practice the government could adopt optional pricing and pro-poor regulation in telecom price regulation in China. The study results also showed that, the most competitive service in turn in Chinese telecom market is: mobile, fixed line, data communication, increment services. Now the regulation and the competition is still focus on the services of mobile and fixed line, which are larger scale and make more profit. The research found that, at present the area economic performance has no correlativity with the telecom price fluctuation except for the middle area of China. During the transition phase from monopoly to competition in Chinese telecom service market, the pricing is disorderly to a certain extend. So the Chinese government should adjust its telecom price regulation to make the price competition in order.Finally, according to Chinese telecom competition and price regulation in practice, the following proposals are put forward: making use of the self-organizing mechanism of market to create a more competitive market structure, setting up a self-governed organization of price regulation, having a definite object from telecom price regulation to deregulation in view of development phase and area performances, consummating the hearing of witness system on telecom price.