Research On Competitive Structure Of The Telecommunications Industry Under Open Conditions

With the rapid pace of globalization, China as a developing country has joined the huge wave. In order to implement the globalization strategy, many developed countries take full advantage of multinational companies to enter the global market. This thesis is elaborating when multinational companies of the telecommunications industry in developed countries enter the developing countries, the competitive strcture and competitive effects of the market in the developing countries would change.Based on the Theory of Comparative Advantage, the Theory of Factor Endowment and Economies of Scale and Trade Theory, this thesis reviewed the course of China’s accession to globalization. Manufacturing is our first industry involved in the global operations. Until the clear division of global manufacturing, this wave swept the service sector in China, which also includes the telecommunications industry. According to the theory of Krugman’s and empirical studies of China’s telecom operators,we concluded that China’s telecom operators have been in line with the necessary conditions for globalization.This thesis describes the usual competition means for globalization, including mergers and acquisitions, virtual operators, strategic alliances and brand control. According to the nature of the properties of these means of competition, we can classify these as lateral control, longitudinal control and technical controls. Especially, mergers and acquisitions and virtual operators are lateral control, strategic alliance is longitudinal control, brand control is technology control. It is through these three forms of control that multinational companies in developed countries succeeded in penetrating markets in developing countries and large-scale looting the local market share. By the model of Comparative Advantage, the Double Fare model and the Lotka Volterra model, this thesis proves that horizontal monopoly, vertical monopoly and technological monopoly make social welfare transferring from developing countries to developed countries, leading to the gap between developed and developing countries gradually widening. This is very unfavorable for developing countries.Finally, respectively from the perspective of law and the perspective of market, this thesis makes out recommendations for China telecom operators. On one hand, the thesis suggests that China should establish a sound system, in conjunction with the rational use of "anti-monopoly"; on the other hand, China is the country with strong manufacturing industry and weak service industry, so China should optimize the industrial structure and try to create a strong competitive atmosphere to enhance technology transfer between enterprises.