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The Phone You're Paying For But Not Getting

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Top message:  Faulty Assumption by T Bone   Mar 20, 2013, 11:04 AM

Replying to:  Re: Faulty Assumption by cellphoneexpert   Mar 20, 2013, 11:08 AM

Re: Faulty Assumption

by vikes0115    Mar 20, 2013, 11:24 AM

I think the prepaid providers are how the issue of the lack of competition in the market, and the issue of pricing collusion, is going to end up being addressed.

Short of denying all new mergers and force the break up of the large national carriers, there are very few ways to increase the level of competition in the market. In fact these methods would likely result in relatively little additional competition due to the limited number of competitors that would exist head to head in each local market.

Rather the better answer may be to regulate the large national carriers in their dealings with third party resellers (the MVNO's). Restricting the amount charged to truly be some level of reasonable profit over their costs would produce the greatest level of competition. This would prevent them from setting their wholesale costs so high as to prevent an MVNO from offering a competitive product on a large scale, at a lower costs (since the subsidy model would be different).

Given the current administration's view on business and mergers, it is only a matter of time before this option is considered as an alternative to denying mergers.

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