Measurement Of Natural Monopoly In Fixed Telephone Service Of China

Since the 1990's,Chinese government had launched three big reform and restructuring in the basic telecom industry.To a certain degree,it undermined the monopoly and restored the market vitality,but it is still a duopoly(China telecom,China rnicom)pattern in the field of fixed telephone service.China Telecom occupies the leading position in south 21 provinces,while China Unicom occupies the dominant position in the northern 10 provinces,so,effective competition has not formed in the fixed-line market.The theory foundation of the monopoly is that the fixed line service has the attribute of natural monopoly,so in the long time the fixed line service was under the government's strict control.But the natural monopoly of an industry is not immutable,such as the U.S.Telecommunications Act of 1996,it clearly pointed out that the natural monopoly of fixed line service has disappeared with the technology changes.Firstly,According to the development of telecommunications technology and the contrast analysis of American telecom reform,This article put forward the original hypothesis:The natural monopoly of China's fixed line business has disappeared.Then it is the construction of the model.In this paper,I select the SUB value as the index of natural monopoly,and select the tanslog cost function(TCF)as the cost function model.Based on the Seemingly Unrelated Regression Estimation(SUR),I estimate the model of the tanslog cost function(TCF)and test the Subadditivity of cost.Finally come to the conclusion that the results confirmed the previous hypotheses,and found that our country's fixed line service doesn't have the characteristics of natural monopoly.