Articles

New Methodology of Regulation Policy for Market Dominant Enterprise in Telecommunication Industry

In-Seong Cho

Abstract

In Korea, regulation on market dominant enterprise is being implemented through the Monopoly Regulation and Fair Trade Act. Criteria for estimation of the dominant operators are estimated for a corporate market share of over 50%, 3 less than the sum of the carrier’s market share greater than 75%. However, these uniform standards that specify the market dominant enterprise have disadvantages that do not reflect the market situation. For example, it is difficult to predict accurately whether the dominant company’s market share rising or falling, where market share of the future will go. Most importantly, understanding of the interrelationships between businesses more than anything else on this important consideration is not well known. To overcome this limitation by applying the diffusion theory in the biology of the future, this study finds the equilibrium and use it to predict the future market trends. Dominant operators and other companies market share will be described as each species by analogy. Rather than simply diffusion from one species could be considered competition between different species Lotka-Volterra model is used. So, we can decide the appropriate regulatory timing with considering the trend rather than mechanically applying based on 50% market share. This more realistically reflect the market situation and could lead to more fair market competition will be. To use Lotka-Volterra model, this study identify the necessary prerequisites and then apply at the high-speed Internet market. Also the effect of regulation is possible to measure by comparing between equilibrium point of regulation period and non-regulation period. The new methodology which is developed in this study could be used as secondary criteria to decide the market dominant enterprise in various industries.

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