Monopoly

Monopolistic Competition

Oligopoly

Perfectly Competitiv e Market

Monopoly There is market power Single seller One product (limited or no good substitutes) Barriers to entry

Monopolistic Competition Many firms Free entry and exit Differentiated but highly substitutable product

Oligopoly Small number of firms Product differentiatio n. Barriers to entry

Perfectly Competitive Market Less market power Price takers Goods are homogenous Free entry and exit Perfect Info.

INDIAN TELECOMM INDUSTRY`

The Indian telecommunications industry is the world's fastest growing telecommunications industry with 652.42 Million mobile phone connections as of July 2010. It is also the second largest telecommunication network in the world in terms of number of wireless connections after China. The Indian Mobile subscriber base has increased in size by a factor of more than one-hundred since 2001 when the number of subscribers in the country was approximately 5 million to 652.42 Million in July 2010. As the fastest growing telecommunications industry in the world, it is projected that India will have 1.159 billion mobile subscribers by 2013.

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The first operator is the state-owned incumbent BSNL. Under the leadership of Rajiv Gandhi, many public sector organizations were set up like the Department of Telecommunications (Dot), VSNL and MTNL. In 1994, P.N Rao led government introduced the national telecommunications policy [NTP] which brought changes in ownership, service and regulation of telecommunications infrastructure. After 5 years the country was divided into 20 Telecommunication circles for basic telephony and 18 circles for mobile services. For cellular service two service providers were allowed per circle and a 15 years license was given to each provider during bids thrown by Government of India.

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BHARTI AIRTEL`

VODAFONE

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RELINCE COMMUNICATIONS

Few Firms Example: By Market cap.

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On the basis of product differentiation. Airtel: - main Concentration on youth. Vodafone: - Business people & youth. Reliance: - targeting lower class people by providing cell phone in 500 Rs. On the basis of entry of firms. Ans: - To enter into mobile service market in India you need to get license from (DOT) there are lot of restrictions from TRAI (Telephone regulatory authority of India).

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On the basis of the presence or absence of price leadership.

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Absence of price leadership in mobile service providers in India.

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On the basis of deliberate agreement, E.g. There is no deliberate agreement between any companies. Plans & tariffs are almost same of all companies but they are not into any deliberate agreement.

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Competition among few: - There are just few sellers under oligopoly. The number could be more than one but not very many. Following are the major players in mobile service providers in oligopolistic market in India.

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Interdependence among rivals firm:

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1) Airtel life time free plan 2) Reliance incoming free plan.

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Possibility of collusion: -

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But incase of mobile service provider in India they are not following any uniform price so this feature is not applicable.

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Rigidity in pricing: -

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E.g. Airtel government employee card 10 paisa per minute to attract Gov employee; Also Tata docomos & others companies plans of pay per second.

` Barriers to entry:- License from (DOT) & Rules & regulation from

TRAI.

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Excessive expenditure on advertising.

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E.g IDEA Cellular AD with Abhishek bacchan, Airtel: - shahrukh khan, MUSIC BY Ar rahman. Reliance :- Hrithik Roshan Vodafone :- use of zoozoo characters.

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The presence of competition on the other hand, helps in preventing oligopoly from market failure. Although the power to operate is only distributed to a few oligopolists, the competition factor encourages them to produce quality goods and services. This also drives them to become innovative and customer-oriented. In turn, the presence of both monopolistic and competitive features in oligopoly creates a balanced system, making it an ideal market structure

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