METHODOLOGICAL APPROACHES AND METHODS FOR IDENTIFYING TELECOMMUNICATIONS OPERATORS WITH SIGNIFICANT MARKET POWER

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METHODOLOGICAL APPROACHES AND METHODS FOR IDENTIFYING TELECOMMUNICATIONS OPERATORS WITH SIGNIFICANT MARKET POWER

Journal Title: ЕКОНОМІЧНИЙ ДИСКУРС - Year 2018, Vol 1, Issue 3

Abstract

The introduction of regulatory mechanisms in the tariff formation process in the telecommunications sector is impossible without the formation of a methodology for assessing the degree of monopolization not only for a specific type of telecommunication services, but also for groups of services. The introduction of economic regulation is important for establishing fair prices, stimulating the efficiency of activities in the areas of telecommunications and protecting the interests of consumers of goods and services. The purpose of the article is to develop a methodology for identifying operators with significant market power as an integral part of the tariff regulation system of the telecommunications sector in Ukraine. The article considered the main conceptual principles on which market analysis and competition assessment methods are based. Among them: static model of the market, which considers the market as an already formed structure in which the connection between all its elements are completed; the concept of a one-product market, which has difficulties in determining the size of the business entity and the product market boundaries. It is determined that the market of telecommunication services is significantly different from traditional commodity markets. Unlike commodity markets, where it is still possible to use the concept of a one-product market for the analysis of competition without taking into account industry-specific technological indicators, the only acceptable approach in the field of telecommunications is a comprehensive analysis. So it is necessary to develop a method for the comprehensive definition of market concentration and operators with significant market power. The economic-mathematical substantiation of the proposed method was considered. This method can be used to analyze both retail and wholesale telecommunications markets. On the basis of this material, an algorithm for complex analysis of the telecommunications market, which consists of eleven steps, was developed. The operator with the largest integral market share has the largest market power. A simplified problem was considered to illustrate the use of the proposed method. Due to the methodology developed in the article, the telecommunications market will be able to become more transparent, equal and competitive, to operate more efficiently, to ensure fair economic competition and to protect the interests of operators. In the future it is recommended to supplement this methodology in accordance with changes in the telecommunications market and in the legislation.

Authors and Affiliations

Kateryna Tanashchuk

Keywords

market power; dominant; market share; telecommunications operator; covariance matrix

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