Influence of the oligopoly market in the Mexican economy
Summary
The objective of this work is to analyze the structure of the oligopoly market presented by the telecommunications industry currently in Mexico, as well as to know the doors that have been opened in the country with respect to this issue. It will be analyzed as the situation in Mexico has changed with the growth and emergence of new telephone companies in recent years and how this has led the country to become a more competitive and inclusive nation in this area, generating great income that is positive for thecountry and their economy and that have given freedom and transparency to Mexican society so that I can choose between various options. The research assumption is: How has the emergence of new companies influence the telecommunications industry in the economy of Mexicans? To answer this issue, different types of methods have been used: the quantitative, analytical and descriptive.
Keywords: telecommunications, companies, competitive, development, oligopoly.
Abstract
The Objective of This Work is To Analyze The Structure of The Oligopoly Market presented by the Telecommunications Industry in Mexico. It will be analyzed how the situation in Mexico you have changed with the growth and surgery of new telephone company in Recent Years and How This has led the country to scholars.
The Research Assumption Is: How has the Emergency of New Companies in the Telecommunications Industry Influenced The Economy of Mexicans? To an answer This Question, Different Types of Methods Have Been Used, Such As: Quantitative, Analytical and Descriptive.
Keywords: Telecommunications, Companies, Competitive, Developing, Oligopoly.
Introduction
The telecommunications industry did not have the freedoms that it now has in the market and in the competitive field with other companies, this covers all areas of the market of this industry, fixed telephone and mobile telephony services, as well as thepay television service, however, as mentioned before, we will focus on mobile telephony services.
Case description (Contextual framework)
Before talking about the telecommunications industry and the important changes that this industry has undergone to become what it is now and what this has caused in the economy of Mexico, it is important to clarify some concepts that will have a strong presenceDuring the development of the essay.
First we must define what a monopoly is: according to the definition given by Michael Parkin (2010, microeconomy) a monopoly is "An industry with a single company that produces a good or service for which there are no nearby substitutes, and that is protected by a barrier that prevents other companies from selling this good or service".
When talking about a monopoly it is important to know that it has two key characteristics:
- There are no close substitutes. Which means that it does not have a competition in the market and the good or service it offers does not have a good substitute
- There are barriers to the entrance of new companies to the industry. Which means that it has a restriction that protects the company that its possible competition
Once having clear what a monopoly is, it will also be covered, which is an oligopoly that to say it in a few words, is totally the opposite of the monopoly, but for a better understanding, we will deepen the subject.
According to the definition given by Mr. Michael Parkin: “Oligopoly, in the same way as monopolistic competition, is between perfect competition and monopoly. In an oligopoly, all companies could manufacture an identical product and compete only in the price, or manufacture a differentiated product and compete in price, product quality, and marketing ”. Oligopoly is a structure that has the market in which:
- Natural or legal barriers prevent the entry of new companies.
- The number of companies that competes is small. Which means that more than three companies are needed but not less than ten to be able to be considered as oligopoly.
The competition between two companies is not called oligopoly and much less monopoly, when there is a competition between only two companies in the market, it is known by the name of duopoly.
Once these two concepts have been defined and understood, this essay has to be passed that as previously mentioned, is to see how trade and economy have improved in the country. We previously defined the word monopoly so that we could understand that the telecommunications industry before becoming an industry with great competitors in the market, this was more than anything a monopoly and was characterized by not having a competition in the market.
Initially the first telephone networks that developed arose thanks to important and entrepreneurs businessmen who decidedTo say that, as can be inferred, they were wealthy people, very well planted in the economic field that sought to develop more;However, as time passed, there was a strong tendency towards the concentration of the different companies that had grown in this market because they wanted to have all the demand charged to the side of their balance and in this way, since the last third of the centuryXIX The telecommunications industry was under two opposite corporate regimes: public and private monopolies.
For a century both regimes had important profits and advanced strongly in the market with the only common objective of providing universal service to the population, that is, to convince that their telecommunications services were better than the other side of the balance andThis way, both regimes developed under the same public utility philosophy. This laid the transcendental bases to be considered as natural monopolies.
Since 1881, that is approximately 69 years ago, the international Mexican telegraphic service;The great Avanece in the 80s in terms of telecommunications, was in the hands of the Mexican telegraph company, an important complement to the Western Union Telegraph Co. From our neighboring country, United States. Until in the year of 1946, when the corresponding public complaint of the contract should be made for having expired time since the last renewal, it was not made because the country suffered an economic crisis that prevented him from making the contract for another period oftime, since it did not have the necessary income to support said service.
Give. In this way, the official denunciation of the contract was not made until June of 1948 and from June 1949 the Mexican government, through the General Directorate of Telecommunications, began to completely control the telecommunications service of thattime, in their own facilities.
Thanks to that, Mexico could develop from there in terms of telecommunications and achieve a great advance until the present that allowed him to obtain great economic income that facilitates and help the country’s economy. However, a lot is still missing since Telcel is still very present in Mexican families, although an oligopoly has developed in the country, if it is about telephone companies, many of us and I include myself in these calculations we still trust very muchIn Telcel, although it may be more expensive from other companies and their packages leave more expensive and include less days, for example, Movistar.
This is because Telcel has proven to be a company capable and offers its customers a very good quality in its services, such as the fact that it is not very easily left without a signal from one moment to another and that you can enjoy your data inany place you go. For all these qualities and a little more, families continue to trust this company and only very few have decided to change companies and try others.
In Mexico, not long ago, exactly in the year of 1989, the first steps for the evolution of mobile phone companies were taken, because it is this year when the country gives the pleasant welcome to the first company that received thename "iusacell". And the following year, in 1990, Mexico welcomes the largest phenomenon of telephone companies;And that to date remains the favorite of many Mexicans, "Telcel". A short time later, these two huge and important companies begin to extend their networks to other sides of the country and became a competition to see who of the two companies became the most important in the country.
At that time the country was divided into 9 regions and each of these regions were divided into 2 frequency bands, the band ‘A’ and the band ‘B’. In each of the 9 regions in the country, there was a concessionaire operating in the frequency band ‘A’ and in the band ‘B’, but this last band had a huge advantage since it had the ability to operate in allThe 9 regions for a single concessionaire, this company was Radiomóvil Dipsa, commonly known as Telcel.
A short time after this market became a duopoly between these two important companies, the Federal Telecommunications Commission (Cofetel), launched a statement opening in the country, the doors for new telephone companies to install the country and thisway, companies such as Unefon, Pegaso and PCS, open their doors to the Mexican market, in addition to the two large companies that were already installed: Telcel and Iusacell. It is in this way that oligopoly in digital telephone companies begins in the country.
By August of the year of 1998, the Nextel International (Nextel) company begins to operate in Mexico, who, shortly afterwards with Motorola to establish a digital radio network (trunking).
In 2001, the Spanish company Telefónica Movistar takes over the 4 operators in the north of the country (Cedetel, Bajacel, Norcel and Movitel). Subsequently in May 2002, Telefónica Movistar acquires much of the shares of the Pegaso PCS company. Becoming the second most important company in terms of telephony, after Telcel.
According to Martínez Martínez and. Thus I advance the telecommunications industry specifically from telephone companies in the country, until today. And today the cell phone sector in Mexico is composed of 5 companies: Telcel, Iusacell, Telefónica Movistar, UNEFON and Nextel. Telcel is the most important operator in number of users, with almost 76% of the national market. Movistar is followed with 12%, Iusacell with 5%, UNEFON with 4% and Nextel with less than 3% of users in the country.
A few years later in the year of 2014, it enters the country, one of the great and important telecommunications companies in the country, AT&T and with its entrance, the purchase of the third largest Mexican mobile phone operator with 8.6 million was announced with 8.6 millionOf customers: Iusacell and a year later, this great company also buys Nextel and that same year, announced the fusion of these three companies, transforming them into a single.
The fact that an oligopoly arose in this industry allowed a new era in telecommunications and the opportunity of a perfect competition in it emerged, also causing that with the appearance of new companies in the country, the prices of these companiesThey will decrease and be more accessible to society and of this, it gave Mexicans the freedom to choose the company that best suits their possibilities.
Now millions of Mexicans and users in the country, have a greater offer of services and telephone companies that provide them to choose the one they like best, now they can also have a higher quality service and at a lower cost, such ashad previously mentioned. In addition, with the reform the long -distance rates have been reduced with less than 40% and mobile telephony with less than 18%. In addition, the oligopoly allowed the 100% national long -distance collection to be implemented in the country, that is, the calls that are made within the territory, and of course, this has generated savings to users by approximately 19 thousandmillions of pesos.
Thanks to the different telephone companies that exist in our country, transparency has been seen and now not only controls us a single company and we have to adapt to the changes, projects, prices and plans that offer us, but now it is possible, thanks to the transparency laws that exists in the country, know what will be the following movements of the telephone companies and be able to continue choosing the one that seems best to us.
In addition, that as I had already mentioned, it also allowed the country, that its economy rose and there were better opportunities for Mexicans, because they made the country a competitive country in this industry and managed to bring to the country great income that is very importantFor the Mexican market.
In the country, this has been a very positive impact since, for example, according to the Bank of Mexico, the reform that exists in terms of telecommunications and the modification of costs has been one of the main and important factorsthat allowed having a favorable closure in the country in 2015 in reference to other years, with an inflation of only 2.13%, which is recognized as the lowest level in history since this indicator is measured.
Mexico has received great income from the telecommunications industry, which of course generates great benefits for the country because the telecommunications industry has ceased to be the obstacle that was previously for the economic growth of the country. Since it has allowed the doors of this sector to open to the competition in the market and has been ableAssumption, improves the quality of life of thousands of Mexican families.
Methods
The methods that were used in the performance of this work were quantitative since graphs, numbers and percentages are used to support the information of the test in a numerical way and thus make the information provided more safely, as well as the analytical sinceVarious sources of information to be able to reach the key points to be treated in this essay and address them correctly and finally descriptive since in the essay there are descriptions of how the country’s economy has changed with respect to the past years and is madeA description of the country’s improvement aspects with respect to the telecommunications industry. In this way, the essay manages to support three different methods so that the information provided is true and has enough bases to be able to support.
Analysis of results
Based on the data collected in this essay, and analyzing all the information provided, it can be said that the country’s economy has had great advances thanks to the telecommunications industry and has allowed to improve the quality of life of people, allowingimprove their income and obtain a lot of benefits that different companies provide in this industry, making telecommunications, an increasingly competitive industry.
Conclusions
At the beginning of this essay, it was made clear that the objective of this was to resolve the investigation assumption of how has the emergence of new companies influence the telecommunications industry in the economy of Mexicans? And to this point, it is clear that this industry has improved the country’s economy since it has generated great income that has been growing and thanks to the information collected in this essay, the foundations could be established to affirm that the economy if it has had greatPositive changes since as mentioned earlier, the country did not always have all the options that today are open to the public, before the country had a monopoly that did not allow entry to other companies and Mexicans had to adapt to this and pricesThat this company imposed but thanks to the constitutional reform of telecommunications new companies have been opened so that Mexicans can choose what they consider best.
The emergence of new companies has generated that there are competition between small, medium and large companies, which in turn has allowed the prices of this service to fall and now human beings can communicate with other people who are in others in othersPlaces of the country or even from the world at more accessible prices and have even allowed people who do not have so many income also have the possibility of obtaining a service and can enjoy the benefits they generate, since in addition to improving prices, places have been opened to enjoy these services for free so that everyone can enjoy the service equally.
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