IDEAS home Printed from https://ideas.repec.org/a/gam/jadmsc/v9y2019i3p49-d243361.html
   My bibliography  Save this article

Oligopolistic Competition among Providers in the Telecommunication Industry: The Case of Slovakia

Author

Listed:
  • Katarina Valaskova

    (Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, 010 26 Zilina, Slovakia)

  • Marek Durica

    (Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, 010 26 Zilina, Slovakia)

  • Maria Kovacova

    (Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, 010 26 Zilina, Slovakia)

  • Elena Gregova

    (Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, 010 26 Zilina, Slovakia)

  • George Lazaroiu

    (Department of Social-Human Sciences, Faculty of Social and Human Sciences, Spiru Haret University, 041916 Bucharest, Romania)

Abstract

The issue of the paper is devoted to the oligopolistic market structure, which is a popular form of imperfect competition occurring in the current market economies. The main aim of the paper is to quantify the selected oligopolistic structure of the telecom industry in the Slovak market in the period 2013–2017. We subjected the oligopoly to concentration analysis of the market to quantify and assess the competitive environment in which mobile providers are operating. Market concentration was measured while using specific indicators of market concentration CR2, CR3, the Herfindahl-Hirschman Index, Lorenz curve, Gini coefficient, and coefficient of variation, using the information on total revenues of operators, the share of mobile operators on total revenues, number of active customers, and the penetration of SIM cards. The calculated values of the selected market concentration indices in the telecom sector proved that the mobile operators market is highly concentrated. The services that are offered by operators are not identical, and they are differentiated based on price, quality, availability, or the target group of customers. We also identified the entry barriers, which can be categorized to strategic, economic, technical, and time barriers. The Slovak telecom sector is an oligopoly where competitors offer slightly differentiated products; however, the competitive environment in which they operate is highly concentrated and competition needs to be regulated to achieve the sustainable development of the telecommunication sector.

Suggested Citation

  • Katarina Valaskova & Marek Durica & Maria Kovacova & Elena Gregova & George Lazaroiu, 2019. "Oligopolistic Competition among Providers in the Telecommunication Industry: The Case of Slovakia," Administrative Sciences, MDPI, vol. 9(3), pages 1-15, June.
    • Handle: RePEc:gam:jadmsc:v:9:y:2019:i:3:p:49-:d:243361
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2076-3387/9/3/49/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2076-3387/9/3/49/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hurkens, Sjaak & López, Ángel L., 2012. "The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain," Telecommunications Policy, Elsevier, vol. 36(5), pages 369-381.
    2. Cave, Martin, 0. "Encouraging infrastructure competition via the ladder of investment," Telecommunications Policy, Elsevier, vol. 30(3-4), pages 223-237, April.
    3. Sridhar, Kala Seetharan & Sridhar, Varadharajan, 2007. "Telecommunications Infrastructure And Economic Growth: Evidence From Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(2), pages 37-56.
    4. Kenneth R. Deal, 1979. "Optimizing Advertising Expenditures in a Dynamic Duopoly," Operations Research, INFORMS, vol. 27(4), pages 682-692, August.
    5. René Caldentey & Martin B. Haugh, 2009. "Supply Contracts with Financial Hedging," Operations Research, INFORMS, vol. 57(1), pages 47-65, February.
    6. Sznajd-Weron, Katarzyna & Weron, Rafal & Wloszczowska, Maja, 2008. "Outflow Dynamics in Modeling Oligopoly Markets: The Case of the Mobile Telecommunications Market in Poland," MPRA Paper 10422, University Library of Munich, Germany.
    7. Severin Borenstein & James Bushnell & Christopher R. Knittel, 1999. "Market Power in Electricity Markets: Beyond Concentration Measures," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 65-88.
    8. Paul M. Sweezy, 1939. "Demand Under Conditions of Oligopoly," Journal of Political Economy, University of Chicago Press, vol. 47(4), pages 568-568.
    9. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles," Econometrica, Econometric Society, vol. 56(3), pages 571-599, May.
    10. Richard Duncombe, 2016. "Mobile Phones for Agricultural and Rural Development: A Literature Review and Suggestions for Future Research," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 28(2), pages 213-235, April.
    11. Jonas Hackner & Sten Nyberg, 2008. "Advertising and Media Market Concentration," Journal of Media Economics, Taylor & Francis Journals, vol. 21(2), pages 79-96.
    12. Heinrich von Stackelberg, 2011. "Market Structure and Equilibrium," Springer Books, Springer, number 978-3-642-12586-7, December.
    13. Rand, David, 1978. "Exotic phenomena in games and duopoly models," Journal of Mathematical Economics, Elsevier, vol. 5(2), pages 173-184, September.
    14. Babacar Ndiaye & Cheikh Thiaw, 2011. "Positioning strategies in the case of oligopolistic competition: The case of telecommunications industry in Senegal," Post-Print halshs-00864556, HAL.
    15. Kostić Zorana & Stojanović Boban & Radukić Snežana, 2016. "Measuring the Level of Competition on the Serbian Mobile Telecommunications Market," Economic Themes, Sciendo, vol. 54(3), pages 323-343, September.
    16. Sang H. Lee & John Levendis & Luis Gutierrez, 2012. "Telecommunications and economic growth: an empirical analysis of sub-Saharan Africa," Applied Economics, Taylor & Francis Journals, vol. 44(4), pages 461-469, February.
    17. Tommaso Valletti, 2003. "Is Mobile Telephony a Natural Oligopoly?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(1), pages 47-65, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thomas Kamalakis & Georgia Dede & Christos Michalakelis & Mara Nikolaidou, 2024. "Game-theoretic analysis of competition between access service providers utilizing a Nash genetic algorithm," Operational Research, Springer, vol. 24(2), pages 1-30, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thornton Matheson & Patrick Petit, 2021. "Taxing telecommunications in developing countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(1), pages 248-280, February.
    2. Alexander L. Wolman, 2007. "The frequency and costs of individual price adjustment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(6), pages 531-552.
    3. Luís Cabral, 2016. "Living Up to Expectations: Corporate Reputation and Persistence of Firm Performance," Strategy Science, INFORMS, vol. 1(1), pages 2-11, March.
    4. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Kauf, Benedikt & Niebel, Thomas, 2016. "The economic impacts of telecommunications networks and broadband internet: A survey," ZEW Discussion Papers 16-056, ZEW - Leibniz Centre for European Economic Research.
    5. Ward, Michael R. & Zheng, Shilin, 2016. "Mobile telecommunications service and economic growth: Evidence from China," Telecommunications Policy, Elsevier, vol. 40(2), pages 89-101.
    6. Rudra P. Pradhan & Mak B. Arvin & John H. Hall & Sara E. Bennett, 2018. "Mobile telephony, economic growth, financial development, foreign direct investment, and imports of ICT goods: the case of the G-20 countries," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(2), pages 279-310, June.
    7. Currarini, Sergio & Marini, Marco, 2011. "Kinked norms of behaviour and cooperation," Economics Letters, Elsevier, vol. 110(3), pages 223-225, March.
    8. Ahrens, Steffen & Pirschel, Inske & Snower, Dennis J., 2017. "A theory of price adjustment under loss aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 78-95.
    9. Lu, Yuanzhu & Wright, Julian, 2010. "Tacit collusion with price-matching punishments," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 298-306, May.
    10. Gentry, Matthew & Pesendorfer, Martin, 2021. "Pricing with bargain hunting consumers," Games and Economic Behavior, Elsevier, vol. 129(C), pages 549-569.
    11. Stéphane Dupraz, 2024. "A Kinked‐Demand Theory of Price Rigidity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(2-3), pages 325-363, March.
    12. Paul Heidhues & Botond Köszegi, 2004. "The Impact of Consumer Loss Aversion on Pricing," CIG Working Papers SP II 2004-17, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    13. Pesendorfer, Martin & Gentry, Matthew, 2018. "Price Reference Effects in Consumer Demand," CEPR Discussion Papers 13382, C.E.P.R. Discussion Papers.
    14. Drew Fudenberg, 2015. "Tirole's Industrial Regulation and Organization Legacy in Economics," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 771-800, July.
    15. Takashi Kamihigashi & Taiji Furusawa, 2007. "Global Dynamics in Infinitely Repeated Games with Additively Separable Continuous Payoffs," Discussion Paper Series 210, Research Institute for Economics & Business Administration, Kobe University.
    16. Torsten J. Gerpott & Jan Berends, 2022. "Competitive pricing on online markets: a literature review," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(6), pages 596-622, December.
    17. Garrod, Luke, 2012. "Collusive price rigidity under price-matching punishments," International Journal of Industrial Organization, Elsevier, vol. 30(5), pages 471-482.
    18. Committee, Nobel Prize, 2014. "Market power and regulation (scientific background)," Nobel Prize in Economics documents 2014-2, Nobel Prize Committee.
    19. Takashi Kamihigashi & Taiji Furusawa, 2006. "Immediately Reactive Equilibria in Infinitely Repeated Games with Additively Separable Continuous Payoffs," Discussion Paper Series 199, Research Institute for Economics & Business Administration, Kobe University.
    20. R. Rothschild, 2010. "Kinked Demand Curves," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 19, Edward Elgar Publishing.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jadmsc:v:9:y:2019:i:3:p:49-:d:243361. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.