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The concentration and competition of vietnam mobiletelecommunications market through HHIand elasticity of demand

The article uses the Hirschman-Herfindahl Index (HHI) and the Elasticity of Demand toevaluate the degree of concentration and competition of Vietnam's mobile telecommunicationsmarket. | VNU Journal of Science: Policy and Management Studies, Vol. 33, No. 2 (2017) 21-29 The Concentration and Competition of Vietnam Mobile Telecommunications Market Through HHI and Elasticity of Demand Dang Thi Viet Duc1,*, Nguyen Phu Hung2 1 Posts and Telecommunications Institute of Technology, Km 10 Nguyen Trai, Hanoi, Vietnam 2 VNU International School, Building G7-G8, 144 Xuan Thuy, Cau Giay, Hanoi, Vietnam Received 16 April 2017 Revised 11 June 2017, Accepted 28 June 2017 Abstract: The article uses the Hirschman-Herfindahl Index (HHI) and the Elasticity of Demand to evaluate the degree of concentration and competition of Vietnam's mobile telecommunications market. For the HHI calculation, the article uses revenue market share data. For estimation of price elasticity of demand, the article uses a regression model with aggregate data of the whole market. The estimation results show high HHI, suggesting high concentration of the Vietnam mobile market which can harm the competition in the market. The high estimated price elasticity of demand indicates that price is actually powerful tool of competition and it is likely difficult for a single company to raise the price in the market without facing a decrease in its services demand. This gives implications for regulatory bodies for regulation options applied in the market. Keywords: Market concentration, Price elasticity of demand, Competition, Telecommunications market, Mobile telecommunications market. 1. Introduction * and if so what the appropriate form of regulations is. Many studies put effort to find out the methods to evaluate the degree of market competition in the telecommunications sector. Some overview studies include [2-5]. Although the studies are different in their focus, it may be possible to point out three sequential steps suggested by researchers to determine the degree of competition and non-competitive behavior of firms in the telecommunications market. Step 1: Define the market. Markets .