Sunday, December 22, 2013

Phseng-Phseng by Ung Bun Ang: Thou Shall Not Compete

The bottom line is the consumers will pay more for the industry that is set to breed inefficiency. And the beneficiary of this floor pricing is some personal interest group [or, Viettel of the Vietnamese military] that has their fingers all over the telecommunication cake.
Thou Shall Not Compete
Ministry of Telecommunication, Public Announcement, 18 December 2013
The Ministry is worried about the lower prices for phone calls that it says violate the WTO regulations. Do they, really? Do the WTO regulations really encourage the Ministry’s floor price fixing?

The Ministry says the pricing war lowers service quality. It implicitly assumes the market is not capable of knowing and choosing between a bad service that costs less and a better service that costs more. Is the public really that stupid? Usually, the market will sooner or later send poor service providers broke, no matter how cheap they are.

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