Telecommunication Industry in Australia: An Economic Analysis

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Author Note

1ECONOMICS ASSIGNMENT
Introduction
The conceptual and theoretical frameworks of economics have evolved considerably
with time and has incorporated new theories and modifications much of which can be
attributed to the increasing dynamics of the global economic scenario. With time, the global
economy has become more integrated and inclusive, thereby facilitating the business
organizations in becoming more complex and multi-dimensional (Kalecki 2013).
The businesses in the global framework operates in different types of market, as per
the conceptual framework of economics. These markets are mainly named as perfectly
competitive market, oligopolistic market, monopoly, monopolistic competition, depending
upon the nature of the commodities or services, the number of buyers and sellers, market
power distribution as well as the entry and exit barriers in the market.
Keeping this into consideration the essay tries to analyse the market in which the
telecommunication companies in Australia operate (Bilbao-Osorio, Dutta and Lanvin 2013).
To analyse the current dynamics and the type of market in which these companies operate as
well as to interpret the same in terms of the different economic concepts the essay refers to
the article named, “8 ‘challenger’ telcos make calls to shake up the big 3’s market share”,
by Patrick Martlew (Channellife.com.au 2018).
Article Summary
The article taken into consideration reflects the view of the Competitive Carriers’
Coalition, which has been relaunched in the name of “Commpete”. The main purpose of the
same is to make an alliance of eight small and medium companies in the telecommunication
industry of the country, in order to address to the problem of the lack of competition in the
concerned sector of the country. The article attributes the lack of competition to the presence

2ECONOMICS ASSIGNMENT
of three big companies, namely the Telstra, Singtel Optus and Vodafone Hutchinson, each of
which enjoy considerable market share in the industry (Corones 2014).
Commpete has set a target of attaining 30% of the market share to increase
competition, not achieving which can be detrimental for both the new and small businesses as
well as for the consumers, while the increase in the competition can lead to fall in the prices
(Walden 2012). The article also highlights the recommendation put forward by the
Commpete in order to understand the factors which have been benefiting the big companies
and to address the situation so as to make it easier for the small companies for venturing in
the telecommunication industry and making it more competitive.
Economic Interpretation of the issue of concern
From the above discussion and from the assertions of the concerned article it can be
seen that the current market structure in which the telecom industry of Australia has been
operating is oligopolistic in nature. This is primarily because of the fact that in spite of the
presence of many small and medium sized companies, the market is primarily dominated by
three big companies, with the market share of the companies being shown in the following
figure:
Figure 1: Market share of the companies in the telecommunication industry in
Australia