A proposed big merger of mobile service providers True and Dtac in Thailand would create a new market leader with as much as 52 percent share. Current market share leader AIS would drop to second with about 44 percent share, creating a two-provider market.
Many observers believe a duopoly would not be conducive to high rates of innovation or price competition. Three or four competitors is the way the market structure alternatives generally are framed. In other words, a minimum of three providers is deemed essential to drive investment, innovation and price benefits for consumers.
Two decades ago, the Organization for Economic Cooperation and Development noted that the entrance of a third mobile provider was correlated with faster subscriber growth. That noted, many observers also believe the long-term stable structure of any telecom market is oligopoly, though periodic market entry by new providers produces the expected competitive effects.
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