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Oligopoly In Canada

553 Words3 Pages

Telecommunication industry is an oligopoly market in Canada for several reasons. The telecommunication industry in Canada is primarily controlled by three big telecommunications firms. Bell, Rogers and Telus. All three of these companies control the market and charge higher prices for telecommunication and wireless services. These small numbers of larger firms have most of the sales in the market. Small companies such as WIND Mobile and chatr are unable to compete with these large firms. All three of these firms have ninety percent of the market share. Canadians believe that the price they charge for their services are too expensive. It created a barrier for other larger telecommunication firms to enter in the Canadian telecommunications market. The price they charge, the quality of service and various other decisions are solely depended upon the other firms. For example, if Rogers gives a wireless package deal for a reasonable rate, Bell wireless and Telus are forced to change its prices and services similar to Rogers. When one firm provide promotional deals, it will force the other two to come up with promotions as well. Each firm knows that their actions will create some effects on other firms in the market. …show more content…

When Verizon was trying o enter, all these of these companies were making advertisement campaign and were telling customers that if Verizon enters the market it will cost Canadians jobs. The economics of scale enjoyed by these three firms prevent the entry of Verizon. However, consumers argue that Verizon's entry may change the quality of service provided by these three companies and will force them to provide services at better rates. They believe that more competition will force these companies to provide quality

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