Analysis on the effectiveness of the asymmetric regulation in the Korean mobile telecommunications service industry

Abstract

The desirability of asymmetric regulation has been one of the important subjects in the regulatory debate. Especially when a market is not competitive due to an asymmetric market situation, the introduction of asymmetric regulation is highly recommended in order to foster effective competition. This paper analyses the effectiveness of the structural asymmetric regulations, focusing on the regulations on M&A and business diversification by market dominant operator in the Korean mobile communication industry as well as a qualitative analysis on the consequences of such regulations in the market competition landscape and on the effectiveness of them This study is to conduct an analysis on the effectiveness of the structural asymmetric regulations among others, focusing on the regulations on M&A and business diversification by market dominants as well as a qualitative analysis using market competition index such as HHI, CR4 which are based on the market share on the changes and consequences of such regulations in the market competition landscape and on the effectiveness of them, and eventually to suggest alternative plans and raise issues wanting further discussions The desirability of asymmetric regulation has been one of the important subjects in the regulatory debate. Especially when a market is not competitive due to an asymmetric market situation, the introduction of asymmetric regulation is highly recommended in order to foster effective competition. This paper presents an econometric analysis model to analyze the efficiency of asymmetric access charge regulation of mobile to mobile calls. We present profit functions of two mobile service providers, one is for dominant and the other for non-dominant provider, which are dependent on the market share, market demand $\It{Q(p)}$ , marginal cost and access charge. We set up two hypotheses on the effectiveness of asymmetric access charge regulation which is concerned with market competitiveness and social w...