Study On The Reform Performance Of China's Telecommunications Operation Business Based On The SCP Theory

This paper reviews the development of China's telecommunications industry,and generlizes that there are three major changes impacting on the telecommunications development:(1) The participation of China Unicom in telecommunications in 1994. (2) The vertical segmentation of the former DGT in 1999. (3) The horizontal segmentation of the former China Telecom in 2001. After several reforms, the competitive situation has been basically formed in different areas of China's telecommunications. The paper analyzes every factor that impacting the market structure, including the size of the market, product differentiation and entry barriers. Then, according to the indicators of market concentration, the paper uses quantitative methods analyzing the market structure. The Conclusion is that: in the field of local phone communications business, forming a basic duopoly competitive situation; in the field of mobile communications business, forming a symmetrical pattern duopoly competition and in the field of value-added business, forming a fully competitive situation. However, there are still many structural problems of the Telecom market that makes the redundancy construction of network and waste of resources.Compared with the previous exclusive monopoly, great changes have taken place of the competition conduct. The paper analyzes the changes from the price conduct and other conduct. The price competition declines the ARPU sustainedly, and the growth rate of business income is slowdown. The non-price conduct including brand strategy, channel strategy, the organizational restructuring strategy and technical innovation strategy, increases the degree of competition, and becomes important increasingly.Changes in market structure and market conduct have also changed the performance of the telecommunications industry and Enterprises. This paper first made a study of the performance of three reforms in state telecommunications and apparently shows: (1) Though theparticipation of China Unicom in telecommunications in 1994 has intensified the competition, the incumbent firm's strategic behavior obstructs the new firm's participation. (2) The vertical segmentation in 1999 leads to double marginalization, but it has actually promoted competition in the long run. (3) The horizontal segmentation in 2001 has ultimately facilitated network competition and improved social welfare. Then the paper made a positive appraisal of the above three conclusions from such three aspects as economic performance, technical performance and performance in resource distribution.Finally, the paper presents regulation proposals. It suggests that non-natural monopoly business should be separated from natural monopoly business and competition in it be strengthened, and strengthen the government control rules, intensify the efforts to punish acts of unfair competition.