Tarrif Reform And Regulation In Chinese Mobile Phone

The development of mobile communication in china has passed through the following three stages: exploiting, developing, and popularizing. And rates policy of mobile communication has great effect on business development during the three developing stages. The more important, Rates of mobile communication service, which have direct infection to funds, market elasticity and the satisfactory degree of the consumers, have great effect on the development of Chinese economy.According to China Mobile communication tariff and price regulation study, based on China Mobile company's financial data for the cost structure and profitability of empirical research space, combined pricing model, price regulation theory, we can get the following five points:1. As capital-intensive features of mobile communications are still very obvious, to ensure the mobile telecom providers can get cost recovery , the monthly cost should be keep in the later years.2. China's current mobile communication tariff model tends to diversity and complexity. While differential pricing can be used to make more profit, Another even more important aspect is that through price concessions for users can maintain and stimulate the consumer. Thus increase the company's revenue. The pricing model will turn more flexible. But excessive fee packages program is not conducive to the choice of consumers, while reducing the transparency of information. To prevent enterprises transform models to price discrimination and fraud. Regulation departments should be strengthened for the mobile phone tariff packages supervision.3. China Mobile demand elasticity is rich . China Mobile will lower price to increase revenue. Also, because cost of revenues elasticity is less than one, revenue increase faster than costs, China Mobile will through price cuts, increase revenue and profits. So we should view the Space reduction of mobile communications market objectively.4. China Mobile elasticity of demand greater than one, the income elasticity is less than a cost, and the future profitability of space trend to increase. This fully shows the cap regulation failed to play its due role. The current cap limit should be adjusted timely with the advances in mobile communication technology.5. With the special economic background in China, the lack of clarity of property rights of mobile communication operators can easily lead to adverse selection. China Mobile company demand elasticity is more than one and cost of revenues elasticity is less than one. Prices can temporarily increase profit of mobile communication operators. If the government price regulation system failed, it is easy to create a single market of price competition, even a price war as excessive competition. This is not conducive to long-term development. In view of the special situation in China and unequal force of China Mobile and Unicom, it is proposed to Continue to implement the minimum asymmetric regulation.