![]() ![]() The second approach is to create financial incentives through revenue limits and quality standards. The first is by improving transparency about performance, which can affect the reputation of the business and its relationships with certain stakeholders. We can influence these outcomes in two main ways. Equally, excessive profits should be limited, poor performance penalised, and businesses held to account when things go wrong that could and should have been avoided. ![]() A geographic area only has one gas network, one electricity network, and one airport for a reason.Įach of these businesses should expect a reasonable return on their investments, and short term rewards for good performance. This is because it simply does not make sense to duplicate existing infrastructure. In contrast, a number of markets in essential industries are monopolies, and they will stay that way for the foreseeable future. For example, we have previously published infographic fact sheets aimed at demystifying broadband services for consumers. The resulting competition between network providers led to increased incentives for investment that have resulted in greater network coverage, and the roll out of new technologies such as 4G and 5G.Ĭompetition can also be promoted by informing and empowering consumers when they have multiple suppliers to choose from. removing a barrier to consumers switching to the new provider by empowering them to take their mobile number with them when they change networks (which is known as ‘number portability’).reducing the costs of network expansion by enabling access to existing infrastructure – such as mobile masts – when installing new transmission and reception equipment (known as ‘co-location’).ensuring nationwide coverage from day one by enabling customers on the new network to use another network when necessary (which is often referred to as ‘national roaming’).For example, we have previously supported the entry of a third player in the mobile market (2 Degrees) by: And the Electricity Authority is responsible for promoting competition in the electricity industry: between generators and retailers, in different parts of the country.Ĭompetition also occurs in the telecommunications industry, and we are entrusted with additional powers to promote competition further. ![]() Airports, for example, facilitate competition between airlines. The process of rivalry between businesses means that excessive profits are limited in the long term, and businesses also tend to have incentives to innovate, invest, and act efficiently.įortunately, competition occurs in many parts of the supply chain for essential services. In most industries, competition between businesses generally ensures that people can get a good deal. ![]()
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