F.4 ECON

HK's telecommunication industry belongs to oligopoly.There are only a few major suppliers for telecommunication in Hong Kong, e,g, PCCW, onetwofree and so on.
The features for this market structure are as follows:
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived from the Greek for few sellers.

There are few suppliers in the market , but they are serving a large number of customers.

The suppliers' influence of price in this market structure is great.Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. The decisions of one firm influence, and are influenced by the decisions of other firms. Strategic planning by oligopolists always involves taking into account the likely responses of the other market participants. This causes oligopolistic markets and industries to be at the highest risk for collusion.

Oligopoly :
1.relatively high barriers to entry
2.a few (about 5 to 10) firms dominating the market
3.they are price setters rather than to take market price (higher monopoly power)
4.highly differentiated product/service

Monopolistic :
1.some or few barriers to entry
2.many firms in the industry
3.they are price takers with low monopoly power
4.slightly differentiated product/service

I believe the market structure of the HK telecommunication industry would be somewhere in between - there is seldom any market structure meet the criteria perfectly so you have to evaluate deeper

1. the sunk cost of setting up a telecommunication firm would be high, but in general i would say that the barriers to entry is not that high, relatively compare to those computer and mobile phone industries, so this would suggest the barriers to entry is between oligopolistic and monopolistic competition.

2.there are not that MANY firms dominating the market, partly due to HK is not a big place such that a few firms could meet the demand of telecommunication well. this would suggest oligopolistic competition.

3.they are more likely to be price setters. this suggest oligopolistic competition.

4.their services are slightly differentiated (not much different from using one to another) or even you might even say it's homogeneous (apart from brand image and goodwill they are pretty much the same) so this would suggest monopolistic competition.