Research On The Economic Incentive Of The National Roating Between Competitive Operators

In May 2008, China telecom industry began the fourth large-scale reorganization. After the reorganization, the telecom industry is dominated by three state-run businesses:China Telecom, China Unicom and China Mobile. In January 2009, Ministry of Industry and Information Technology of the People's Republic China (MIIT) issued 3 licenses for its third generation mobile phone technology. China Telecom, China Unicom and China Mobile gained their 3G licenses for their TD-SCDMA, WCDMA and CDMA2000 businesses respectively. With the construction of 3G network, in order to prevent redundant construction, the infrastructure sharing and national roaming are becoming the hot topics.National roaming refers to an agreement among operators to use each other's networks to provide services in geographic areas where they have no coverage. Such arrangements effectively multiply any one carrier's ability to cover the entire country, without actually having to deploy infrastructure everywhere.This paper aims to study how to develop a reasonable charge of national roaming in order to ensure that all operators have the incentive to carry out national roaming.In this paper, we analyzed both advantages and disadvantages of national roaming. By building a model of the national roaming, we have studied the optimal decisions of operators involved under different charges of national roaming. Finally we proposed some advice on the regulation of national roaming, based on the incentive compatibility mechanism.