On The China Mobile Communication Market Based On The Consumer Switching Costs

With the economy era from industry economy society to the knowledge economy society, the business of enterprises gradually shifts from value-oriented to demand-oriented concept. To survive and develop in competitive market, the enterprises must obtain the profits; the pursuit of profit maximization is one of the objectives for their existence and development. Enterprises'profits originate from customers, but old customers can create more profits than new customers, which have already been recognized as the basic principle by the theorists. The rapid development of global economy, the rapid increase in production volume and variety, more producers, higher productivity and low inflation and other factors build up the paradise of customers, in which consumers have more choice opportunities and rights. However, enterprises with certain market strength frequently use switching costs to lock customers to gain maximum profits, which contradict with the needs for the diversification of customers'choice. If great importance fails to be attached on this contradiction, customer switching costs will be one of the ways leading enterprises obtaining monopoly profits, which will restrict the development of orderly competition among enterprises and do harm to consumer welfare.As china mobile communication market has a typical feature——duopoly, in which leading manufacturers have strong monopoly power, and consumer switching costs are very high. Starting from china's mobile communication market, this thesis analyzes the impacts of consumer switching costs on mobile communication market from three respects of market structure, conduct and performance through the combination of theoretical research and standard research, empirical research and practical research as well as the method of game theory. Finally, this thesis puts forward the corresponding proposals and regulations: In the market structure——government regulations should fully respect the market mechanism, and the monopoly market taken up by mobile communication will be open to other efficient enterprises participating in the competition, in hope of improving the efficiency of industrial operation by the strength of market competition, supporting small and weak business and creating a fair competitive environment by means of asymmetric regulations, so as to weaken the advantages of incumbent manufacturers using monopoly power to enhance customer switching costs; in the market conduct——the government should focus on regulating the competition behavior among operators and between operators and users (Proposing the way of"Number Portability") to protect the interests of users better.