Research On Pricing Of Domestic Telecommunication Industry Based On Incentive Regulation Theory

Reform of the telecommunication industry mainly tried to break the monopoly of the former Ministry of Posts and China Telecommunication. Although there is no big deviation, we feel forward step of the reform is too slow and the method of regulation is not perfectly, so it can not fully cater to the need of the Telecommunication industry, to some extent, which hinders the further development of China Telecommunication industry and results in some firms regulated with low efficiency.Based on what mentioned above, combining with the studying the past and current situation of development of China Telecommunication industry, this paper does some in-depth and systematic research from a perspective of both theory and method on price regulation, which is the core question of regulation of China Telecommunication industry.Firstly, the author looks back the reform of China Telecommunications price regulation system comprehensively, then depicts and analyzes the current situation of China Telecommunication industry's price regulation, finally points out the current price of the China Telecommunications regulation is instinct pricing.Secondly, this paper fully introduces incentive regulation. In this part, the author narrates the incentive regulation model of government, by using the basic principle of Entrust-Deputy model of the Information Economics, when information is asymmetric.Thirdly, this paper introduces and analyzes the three methods of pricing of regulation--Return on Investment, Price Cap and Revenue Cap. After analyzing the advantages and disadvantages of them, the author tries to build China Telecommunication Price Cap regulation system models combing with the current development of China Telecommunication industry and the principle of Price Cap regulation model.