Linked by Thom Holwerda on Sun 20th Mar 2011 20:20 UTC
PDAs, Cellphones, Wireless A major deal just went down in the United States, which seriously shakes up the mobile industry on the other side of the pond: AT&T has announced it plans to buy T-Mobile USA from Deutsche Telekom.
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Invisible hand
by Neolander on Mon 21st Mar 2011 07:43 UTC
Neolander
Member since:
2010-03-08

I wonder, where are those usually defending the invisible hand of the free market right now ? I can't see them anywhere...

I mean, for everything which my country does badly, we are soon getting another mobile carrier, which doesn't seem to want to cooperate with the three others on pricing and has some interesting plans on the infrastructure side. But looking at the three others trying to sue it to hell before it's even there and now claiming that they won't give him access to their cellular network, I wonder if he would have made it without help from the government and the EU...

Reply Score: 2

RE: Invisible hand
by ricegf on Mon 21st Mar 2011 11:14 in reply to "Invisible hand"
ricegf Member since:
2007-04-25

Well, I for one am a huge fan of the invisible hand, but after 50 years and quite a few grey hairs I am also a huge fan of the government hand slapping its greedy little knuckles when power begins to consolidate into a few soulless corporations.

I don't want the government running business, explicitly or implicitly - that's worse than a business monopoly IMHO.

But we have Sherman Anti-Trust for a reason. Freaking use it to ensure meaningful competition, or we all lose.

Reply Parent Score: 2

RE[2]: Invisible hand
by Neolander on Mon 21st Mar 2011 12:53 in reply to "RE: Invisible hand"
Neolander Member since:
2010-03-08

Then we may agree ;) What I'm against is total deregulation of the market, claiming that the invisible hand will magically solve all problems by itself. I've nothing against more hybrid government+companies schemes, as long as they guarantee a good minimal level of service/customer care.

As an example, except in highly exceptional events (wars, big sismic activity), telecom networks should not be down for more than a week, water distribution should not be stopped for more than 2 days, postal services should guarantee that letters and packages will be delivered within some country-dependent delay on the whole territory (not only big cities), nuclear power plants shouldn't leak dangerous crap in the environment and we should aim at using cleaner energy in the future, etc...

Afaik, this way of having the government put constraints on companies but trusting them even for basic services is how it works in some countries of northern Europe. Will check when I go to Sweden this summer.

EDIT : Oh, and also, there are some areas which are intrinsically not profitable in the short term (like fundamental research), and for that I don't think that companies should be trusted.

Edited 2011-03-21 13:06 UTC

Reply Parent Score: 1

RE[2]: Invisible hand
by molnarcs on Mon 21st Mar 2011 12:58 in reply to "RE: Invisible hand"
molnarcs Member since:
2005-09-10

I don't want the government running business, explicitly or implicitly - that's worse than a business monopoly IMHO.

Although I agree, I have an interesting counter-example. In Vietnam, there are about 6 or 7 carriers. The two largest are state owned (VinaPhone, MobiPhone), while the third largest is owned by the army. Another small one is owned by the secret service (yeah, I'm not joking! you can buy cellphones directly from the secret service around here).

Now the interesting thing is that these three companies are at each others throats! Competition is so fierce, the prices have been dropping steadily in the past few years. In fact, the government had to intervene (just issued a new decree last year) because they were so busy undercutting each others prices, that smaller carriers could not compete (ie they can't afford to run at a loss for a few weeks like the major ones). They have dirt cheap pay-as-you go packages, and almost every month they have days when you can recharge your phone and get double the value (pay 100.000 VND and get 200.000 for example). 100.000 VND is about $5, that basically lasts for about a month. You can use 2g with data (GPRS optional), 3g + data (HDSPA), and the latter is so cheap, that now I know people who switched from ADSL at their homes to 3g (via tethering).

How they do it? Well, despite the fact that they are owned by the state (plus one by the army, one by the secret service), they are run like a real business - ie the government won't help them if they fail in the market - so they must produce profit, must grow their customer base and retain them, in other words, they must compete just like any other company. And despite the fact that the owner is the same (in case of VinaPhone and MobiFone)they have their own, completely independent management, CEOs, etc.

edit> forgot to add - one of the major ISPs (FPT telecom) is also state owned. So now they are in fierce competition with VinaPhone and MobiFone (+ Viettel, the army owned one) for a share of the Internet market. The cellphone companies are selling cheap 3G sticks for mobile internet, pay-as-you go or on contract (in which case, they throw a free netbook at you).

Edited 2011-03-21 13:04 UTC

Reply Parent Score: 2