What is Better for Consumers: Fewer or More Suppliers?

Would mobile operator consolidation produce more--or less--competition, in U.S. and other markets, and is less competition better for consumers? Such questions will, and perhaps must be asked, as market consolidation happens in at least some markets. India’s market already has begun the process, and the U.S. market is on the cusp of possible change of that sort as well.

The empirical record cannot be understood in advance of any changes, but arguments will be made--for and against--regarding consolidation of the number of market suppliers. In other words, some will argue, with some justification, that consolidation will lead to stronger and more robust competition.

The issue is that only a few providers actually can sustain themselves, long term, in mobile or fixed networks facilities business.

So the trick is creating a policy environment where enough competition exists to drive lower prices and consumer benefits, but also innovation and investment. You need both competition and investment.


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