The Research Of China’s Telecommunication Competition Policy Under Transition Background

Since the 1990s, China’s telecom industry has been developing rapidly. Mobile phone field has 1.28 billion users by the end of 2014 as the process of the substitute fixed telephone business for mobile phone telephone. The impact of the telecommunications industry becomes more and more prominent, from being an "bottleneck industry" to coordinating development with various departments of the economy. Meanwhile, the telecommunications industry has been experiencing a deeply antitrust reform, from China Unicorn’s establishment in 1994 to vertical and horizontal segmentation in 2000, and then reorganization in 2008. In the end, there are three full-service operators which are China Mobile, China Unicom and China Telecom. All the reform process is controlled by the government, which is linked with the environment of transition economy. With the rapid advances in electronics, communications, Internet technology, the trend of mobile inconnect becomes more and more intense. Telecom industry is also facing increasingly fierce competition of radio and television industry, the internet and other cross-industry. Under the WTO provisions of entry of foreign capital in the near future, China’s telecom industry will confront more strong opponents. Administrative monopoly restricts the healthy development of the telecommunications industry, and the merging process of three networks makes the telecommunications industry face more and more competition. Therefore, the research of the telecommunications industry competition policy under the conditions of the economy transition has some strong theoretical and practical significance. The paper aims to further enhance the level of competition in the telecommunications industry in China, promote regulatory efficiency of the industry regulators and operational efficiency of the industry.This paper uses empirical analysis to evaluate Chinese telecom market forces, in order to have an overall understanding of the market structure of telecom industry. This analysis will provide a basis for competition policy design in the telecommunications industry. In the part of assessing market power of the mobile industry business, the author partially assisted some cases. The paper measured the efficiency of the telecommunication industry after the latest reorganization using DEA method and discussed telecommunication industry access pricing as a networks industry. The innovations of this paper have three points:first one is to set up a relatively complete system of telecommunications competition policy research. Second one is an empirical evaluation of operator’s market power in the field of mobile communications business in China’s telecom industry. The third one is to measure operational efficiency China’s telecommunications industry from the operator level.The whole paper consists of three parts, and has seven chapters.The first part is to generally summarize and refine the theory of industrial organization and competition policy which includes the first chapter and the second chapter’s relevant literature review and concepts definition. The first chapter is introduction, which describes the research background and the practical value of the paper, reviews the representative research results since the reform of the telecommunications industry, in order to indicate theoretical and academic value of thesis topic. The first chapter also summarizes the research ideas and research methods, theories involved and finally gives the logic system of the whole paper, the main contents and innovative points. Chapter two concepts definition and literature review. Administrative monopoly, market power, access pricing and competition policy are defined one by one and literature reviewed, according to the logic of the paper.The second part of the paper analyzes the current situation and the efficiency impact of competition in the telecommunications industry, which includes chapter three and chapter four. Chapter three is the evaluation of market power in the mobile telecommunications market. The paper selected mobile communications business industry as a representative to examine three operators’market power from the market structure of the angle, and then used operators" behavior and their performances to prove market power of operators’in the market The market power of three operators in the mobile business field of power there is different obviously. China Mobile has a strongest market power, and China Unicom and China Telecom have a equivalent market power. Chapter four is the analysis of telecommunications access pricing. The paper firstly introduced meanings of the interconnection and access pricing, and then explained different access pricing methods. It put forward that the price level of access pricing will affect the interconnection of the telecommunications industry. Summarized analysis of the current problems of access pricing is also in this chapter. This chapter finally gave a world horizontal comparison access pricing in different countries, in order to find a reasonable and scientific access pricing method for Chinese telecom industry.The third part is to assess the efficiency of the existing telecommunications competition policy and supply recommendations for the perfection of competition policy in the telecommunications industry. This part includes chapter five,six and seven. The fifth chapter analyzes the efficiency of the telecommunications industry. This chapter firstly introduced efficiency measure theory, and then chose non-parametric method of DEA to measure the operational efficiency of the telecommunications industry since 2009 reorganization and found that TFP in frequently fluctuated in the former years, and did not always show an upward trend. Between telecommunications industry market structure and operators’productivity, there is still a negative relationship just like the industrial organization theory opinion. Chapter six is to design and implement the competition policy of the telecom industry under the background of transition economy. Social or consumer welfare maximization, industrial efficiency, social and political goals are all the goals of competition policy design. The competition policy design not only adapts to China’s national conditions, but also takes into account the coordination with industrial policy and open economy. In this process, we also need to perfect law system and improve institution’s independence. The last chapter is conclusions and prospects. This chapter summarized main points and conclusions of the whole paper and gave an outlook of the telecom industry and finally, the paper pointed some research questions in the future.