Custom «Telecom: a Case of Monopolistic Competition» Essay Paper
Any aspect or sphere of a person's life can be considered in an ethical context. Business is not an exception as it involves people's ideas and actions. The greatest dilemmas of business ethics are related to finding a balance between gaining maximum profits and satisfying both the customers and the companies' interests. This paper analyzes a case of business monopoly ethics in the sphere of telecommunications and offers some possible decisions for an ethical issue involved.
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The case study offered for consideration provides a historical review of the development of telecommunications in the world, particularly in India and Ethiopia. According to the case study, “telecommunication is an important part of the world economy and the telecommunication industry's revenue was estimated to be $1.2 trillion in 2006” (Telecommunications sector, 2010, para. 1). Therefore, currently, the sphere of telecommunications is profitable and grows rapidly. However, some time ago, people could not even imagine that the humanity would have a chance to use mobile phones and the Internet, sending letters through the usual post. At first sight, technological progress can bring only positive consequences to people. However, the ethical dilemma involved in the sphere of telecommunications mostly concerns the role and influence of telecom companies on the market and the benefits that consumers have because of a monopolistic environment created for telecom services.
India became a focus of attention of the considered case study as the sphere of telecommunications has developed quickly in this country in the shortest terms. Nevertheless, it has also experienced some serious challenges. The history of telecommunications in India started in 1947 and “by 1999, India had an installed network of more than 25 million telephone lines that spread across 300 cities, 4869 towns, and 310,897 villages, making India`s telecommunications network the ninth largest in the world” (Telecommunications sector, 2010, para. 5). The challenges for India telecom sphereare related to the fact that telecommunications were originally considered purely monopolistic in the country. Despite a rapid growth of a telecom sector in India in the 1990s, the Ministry of Posts and Telegraphs took its time to implement any innovations in the beginning. Moreover, it refused some international companies that were eager to offer centralized telephone exchanges to the Indian population. They stated that the Indian government was fully in charge of any movements in the telecom sphere. Ethiopia had a similar situation as the monopolistic control of the country’s telecom sphere led to suppressing the progress. Moreover, direct consumers also suffered from the total control of telecommunications by one single company. The case study states, “one major problem with telecom monopoly is that monopolist may exploit its market position by charging excessive prices and compromise quality of service” (Telecommunications sector, 2010, para. 28). The mentioned discrepancy between the monopolistic character of telecommunications formed with the purpose of total control and big revenues and the quality and price of the services rendered to customers is a foundation of an ethical dilemma.
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Bašić (2008) performed an interesting investigation of the ethical issues involved in monopoly and free competition in telecommunications. The author decided to research why telecommunications are considered monopolistic by nature and whether it is needed or possible to change the system to make it more effective. Bašić (2008) states that the ethical principles are not universal and there is no unique definition of “fair business”. Sure, monopoly kills competition that is proved the main engine of business. However, no grounds exist to confirm that if the monopoly is broken, the ethical principles and rights of the citizens are observed (Bašić, 2008). “The antimonopoly rules were not enforced to protect the ethical principles. They serve to set fair rules of a “competition game” (Bašić, 2008). That does not mean that the disruption of antimonnopoly rules should automatically be classified as “non-ethical” or “immoral” (Bašić, 2008, p. 14). Therefore, the author does not see any violation of ethical principles in forming monopolies and is sure that the most important thing for big business is not ethics but competition. However, Bašić (2008) also mentions the notion of “natural monopoly” (p. 23), discussing state monopolies, which do not allow any privatization. The cases of India and Ethiopia can be called “natural state monopolies”, in which neither business nor ethical principles are observed. Thus, to promote a healthy business environment and investments, as well as meet the consumers’ demand properly, both countries should allow other companies to enter the market of telecommunication services and give people a chance to choose an operator or a supplier. Though both India and Ethiopia make steps to develop their telecom sectors, the results are still not as good as desired. For instance, Ethiopia has created favorable conditions for investing but has not developed the privatization rules. On the other hand, India, opened to private ownership now, has destroyed its telecom sector during the years of total monopoly. Thus, it is logical to support Bašić’s (2008) opinion about state monopolies and confirm that reasonable competition improves the quality of services the customers receive, hence observing the ethical principles.
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Considering everything, it is important to conclude that the rules of business do not always follow the ethical principles. The situation with telecom sector in India and Ethiopia demonstrates that consumers pay much money for a bad quality connection. The states having monopolistic telecom systems should develop laws and regulations for promoting privatization, investments, a wide price range, and high-quality telecom services. By doing so, they would not violate the main ethical principle related to telecommunication, namely not to interfere with people’s ability to connect with their families and friends any time they want.
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