| Because of "natural monopoly", many countries impose strict control on access to the telecommunications markets, and telecommunications industry has long maintained market monopoly. With economic development, evil of monopoly has started to emerge in the telecom industry. Enterprises are lack of competitive pressures or the incentive of technological innovation, couldn't control the operate cost effectively. Tariffs remain high in a long time, which restricts development of the telecommunications industry. Since the last century, the 1980s, many countries have begun to relax the control of the telecommunications industry, introduce of competition and attempt to eliminate the shortcomings of the monopoly, improve enterprise efficiency and enhance consumer welfare. For the same purpose, in 1994, China started the reform of the telecommunications industry. Because of institutional reasons, the effect of this reform is not satisfactory. From 1998 to the end of 2002, the telecommunications industry has undergone many restructuring and reform. The aims are promoting competition mechanism. On the experience of other countries, after the introduction of competition, the telecommunications service tariffs decline for most countries, which lead to an increase in the demand on telecommunications. Then, after the introduction of competition in China, whether the overall level of tariffs change significantly, or what kind of features show in China's telecommunications industry?In this paper, we construct a composite price index of telecommunications services using the data from"China's telecommunications Statistics Annual Report". First, take voice telecom business income of unit call as agent variables of the prices of telecommunications services. Then select a benchmark level, take the price index of Shan Xi in 2002 as 100.At last, we get the composite price index of telecommunications. We Measure the overall price level of telecommunications services of different regions using the price index. The results show that from 2001 to 2005, local fix telephone price index rise, long-distance fix telephone and mobile communications business showed a downward trend, especially the mobile communications. By calculating the weighted price index of the three business, we get composite price index of telecommunications, which also seen a substantial decline. By analysis of cross-section data, we find that telecommunications services price index showed a great deal of difference. From 2001 to 2005, the arithmetic average of telecom composite price index of different regions are 107.47,94.88,88.68,81.73,76, and the standard deviation are 12.13,14.82,14.92,13.79,4.36. The coefficient of variation are 0.113,0.156,0.168,0.169,0.189.What caused the difference in regional telecommunications service tariffs, why in a few years the price level of regional telecommunications services drop sharply? The article starts with the competition of telecommunications industry and tariff policy. Then give the general theory of the formation of telecommunications price. Because of the difference in basic characteristics, operating costs, consumer demand elasticity and competition intensity in telecommunications market, the affiliates take different strategies in accordance with the market situation, which led to the regional differences in prices of Telecom services. With the development of telecommunications industry, the average cost of telecommunications dropped, which provides a space of cutting the price. Since the introduction of competition, the operating businesses increase. Then the companies expanded the investment, which enhanced the industry's supply capacity. In theory, these factors will make telecommunications charges drop to lower level. Using the provincial panel data from 2001 to 2005, we establish econometric model to analysis of the regional differences and changes in price levels of telecommunications. Model is as follows: PI it =α+μt+β1G DPPCit+β2CAPit+β3POPit+β4AREit+β5HHIit+β6ACit+εitThe coefficient of GDP per capita is positive, means having significant impact on telecommunications services prices. Unit cost is correlated with the price level of telecommunications, through notable test. It means regional price level of telecommunications services is the formation of cost-based feature. On testing significance, the total population of different provinces has a significant impact on the price level of telecommunications services, which is consisted with our expectation. However, the impact is weak. Because the population is not directly represented in the number of telephone users, the impact on the price level is indirect. Geographical Factors is through testing at 10% significant, and regression coefficient is negative. When added to the area of 100,000 square kilometers, telecommunications Price Index falls 0.45 points. The coefficient of total assets is not significant which shows that the capacity constraints of telecommunications industry have been solved from 2001 to2005 has no significant impact on the price which measure the degree of concentration. One possible reason is that there are not significant differences in telecommunications market. we can see it from HHI values. In addition, perhaps HHI is not a suitable index to measure the degree of market competition.Our studies show that the overall price level dropped significantly after the introduction of competition in the telecommunications industry in various regions of. However, does the price competition result for the development of the telecommunications industry? From a consumer's point, we discuss the proliferation of telecommunications services, the relation between telecommunications services demand and price levels. Then we analysis of the relation between competition and the industry operating efficiency. In 2000, the total value of telecommunications business is 449.4 billion yuan. By the end of 2005, it is 1.15753 trillion yuan. Apparently, the factor of income can not explain the changes in the telecommunications business volume. So we expect the changes in the price level of telecommunications explain changes in the volume of telecommunications. Our interest is to investigate the price level of telecommunications services, as well as regional economic factors on the overall telecommunications business, So econometric model is as follow:Yi t =α+μt+β1 PIit+β2SALEPCit+β3SUBSit+β4AGEit+β5ARE+εitWe adopt the fixed effects model, the results indicate that the model fit well, and adjusted is 0.86. Retail sales of social consumer goods of per capita, the number of telephone users has a significant positive impact on the telecommunications business volume. Lower level of telecom prices is an important reason for business growth. With the establishment of competition, consumers can choose more types of telecommunications services. In the business market, there are international and domestic long-distance, local, mobile, data, IP telephone. Various telecommunications services in China have been offered, and meet the community's needs at various levels. Reform and development of telecommunications in China has bring consumers benefit. Notable character of telecommunications industry is external networks. New user's access to the network will increase the utility of existing consumers, and the current size of the network has a significant impact on the new enters. By the end of 2000, mobile phone users are less than 85 million. By the end of 2005, the number of mobile phone users is up to 393.43 million. By using the proliferation model of telephone users including the network effect, we explain the developments of China's mobile phone users. The results show that the level of economic development has a significant impact on the penetration of mobile phone. At this stage, the business of mobile phone is still in the development stage. In some economically backward areas, the number of mobile phone is small, which is due to economic conditions. The proliferation of the users will also be restricted. The number of telephone users has significant impact on mobile phone proliferation, showing obvious network effect.The price level of China's regional telecommunications services decreased rapidly in a few short years. Telecom deal with the decline in the price level, the enterprises strengthen the management, and take efforts to control costs. This is shown in the decline of the ratio of main business telecommunications costs to operating income, particularly in the region with high costs, this indicator dropped even more. With the decline of charges, the advantage of dominance is gradually disappearing. Enterprises began to strengthen management, in order to enhance competitiveness. |
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