10302 Managerial Economy
Final Case Report
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施佳綸
王 盈
梁晉綸
鍾智閔
陳彥伶
程于青
-First Part
-First Part
-Second Part
-Second Part
-Third Part
-Third Part
O First Part
Agenda
 Brief introduction of CHT
 CHT and Taiwan telecom industry
 Oligopoly
O Second Part
 The pricing policy of CHT
 Comparison of two kinds of charging method
 Other Charging methods
O Third Part
 CHT’s History
 CHT’s Mobile service
Brief introduction of CHT
O Listed company (TWSE, NYSE,
2000AD)
O Establish: 15 June, 1996
O Chairman of BOD: Li- Sing Tsai (蔡力行)
O CEO: Mu-Biau Shi (石木標)
O Headquarter: Taipei, TW
Brief introduction of CHT
O Communication service industry- the
biggest holder in Taiwan
O Service:
a) Mobile telecommunication
b) Immobile telecommunication
c)
Internet service
CHT and Taiwan telecom industry:
Comparison of scale and access
Operator
CHT
Taiwan
Mobile
FET
T Star
Asia
Pacific
Leading
enterprise
N/A
Fubon
Far Eastern
Group
Ting-Hsin
International
Group
Foxconn
Technology
Group
Chairman
Li- Sing Tsai
Ming-Shing
Tsai
Shiu-Dung
Hsu
Guo-Shuai
Chao
Fang-Ming
Lu
Domestic
investment
group
MOTC(35%)
Fubon(6%),
Shing
Kong(5%),
Cathy(4%)
TFN(96%),
Fu-ji(4%)
Yuan Ding
Co.(99%)
Ting
TW Business
Hsin(52%),
Bank, Mega
LinYuan(20% Bank, MOTC
),
FoxLink(10%
), New
Kinpo(10%)
CHT and Taiwan telecom industry:
Comparison of scale and access
Operator
*Total
assets
CHT
Taiwan
Mobile
FET
T Star
Asia
Pacific
$452,695,974 $157,229,77
0
$126,349,81
5
N/A
$41,218,454
Mobile tele.,
Immobile
tele.,
Internet
Mobile tele.,
Immobile
tele.,
Internet,
WiMax,
digital
service
Mobile tele.
Mobile tele.,
Immobile
tele.,
Internet,
international
commu.
(NTD)
Main
Services
Mobile tele.,
Immobile
tele.,
Internet,
CATV
*2015 Q1
CHT and Taiwan telecom industry:
Market share
7%
CHT
36%
25%
FET
T Star
Taiwan Mobile
Asia Pacific
6%
26%
*2014 Q4
Resource: http://www.ncc.gov.tw/chinese/news.aspx?site_content_sn=2016&is_history=0
Introduction for
Oligopoly Market
O Market power: ability to influence price
Monopoly/
Monosony
Oligopoly/
Oligosony
Perfectly
competitive
market
One supplier/
One buyer:
With no close substitute.
Few supplier/
Few buyer
Free entry
Telecommunication
market
Why
tele market CANNOT become “Monopoly”?
Fair Trade Act
Fair Trade Commission
Article 7 The term "monopolistic enterprise" as used in
this Act means any enterprise that faces no
competition or has a dominant position to
enable it to exclude competition in the
relevant market.
Two or more enterprises shall be deemed
monopolistic enterprises if they do not in fact
engage in price competition with each other
and they as a whole have the same status as
the enterprise defined in the preceding
paragraph.
Fair Trade Act
Fair Trade Commission
Article 9 Monopolistic enterprises shall not engage in
any one of the following conducts:
1. directly or indirectly prevent any other
enterprises from competing by unfair means;
2. improperly set, maintain or change the price
for goods or the remuneration for services;
3. make a trading counterpart give preferential
treatment without justification; or
4. other abusive conducts by its market power.
joint monopolization
How come
tele market CANNOT become
“Perfectly Competitive Market”?
Hard to Entry
O High cost to obtain the extra access
O Professional technique is difficult to
O
O
O
O
O
perceive
Limited License
Effect of Scale economy is too high
Products’ similarity
Enormous capital needed
Low replacement cost between products
Oligopoly:
Network effect
O Network externality
O Benefit or cost, depend on the total
users in network
O Indirectly influence (through market)
O Critical mass: number of users where
demand becomes positive
O Demand elasticity
Oligopoly:
Network effect
CHT.
..
CHT!
CHT!!!!!!!!!!!
The Pricing Policy of CHT
4G一般月租專案
4G預付卡
Comparison of
two kinds of charging method
O Post-paid
(1)Charges for a fixed fee for usage under a certain
amount, charges more when you exceed
(2)More flexible internet usage
O Pre-paid
(1)Charges only how much you use
(2)Only two payment choice
Comparison of
two kinds of charging method
O Pros of Post-paid
(1)For customers who use approximately the same amount
monthly, as there will be bonus free hours for them
(2)Unlike pre-paid service, you can still enjoy the service when
you exceed the amount
→Post-paid services are for costumers who has a more certain
communication habit. Hence, the initial prices are higher.
Comparison of
two kinds of charging method
O Pros of pre-paid
(1)User are able to constrain their cost of communication effectively
(2)Suitable for people call when only needed
→Pre-paid service are for costumers who does not has a certain
communication habit. Therefore, there are two kinds of pre-paid card
available $300 and $500
Other Charging methods
學生專案
大家講資費專案
放心講資費專案
熱線群組專案
Pricing Policies
for other charging methods
O Student Program
Due to higher communication usage of students, CHT
created service programs which has higher monthly
fee with higher internet usage service.
→Pricing policy toward students
Pricing Policies
for other charging methods
O 大家講資費專案(Let’s talk)
For customers who has a large number of contacts.
Charges same amount for both inter- and intra- calls, so
costumers doesn’t have to worry about costing too much
call people inter-network
→Pricing policy toward people who use voice communication more often.
Ex: business man, House seller
Pricing Policies
for other charging methods
O 放心講資費專案
Programs which allow parents to monitor how much
their children use, for parents can set the limitation of
communication usage
→Pricing policy toward parents who need to control their children’s
communication usage
O 熱線群組專案
For costumers who has only a few contacts. By setting
hot-wire contacts, calling them will be charged only the
lowest price per min: 0.72 dollars
→Pricing policy toward people who only has a small number of contacts
Supply curve of some programs
CHT’s History
O Monopoly in telecommunications market
A business unit of the Directorate General of
Telecommunications (交通部電信總局) for
over 100 years.
O “Telecommunications liberalization" from
the late 1980s which aims to make the
telecommunications industry more
competitive and improve service quality and
achieve "separation between government
and enterprises".
CHT’s History
O Chunghwa Telecom founded as a company
on June 15, 1996
Chunghwa Telecom Co. Ltd. operated first
class and second class telecom services
In 1996, its stocks were totally held by
government, but its goal was become private
company.
O Officially became a private company
August 12, 2005, the Government of China
Telecom's stake to 50%.
CHT’s Mobile services
O In 1997, 2G
O In February 2002, 3G
O May 29, 2014, 4G LTE services.
the first telcompany in Taiwan to
provide 4G LTE services.
Reference
O
O
O
O
O
O
O
O
O
O
O
O
O
O
https://zh.wikipedia.org/wiki/%E5%85%86%E8%B1%90%E5%9C%8B%E9%9A%9B%E5%95%86
%E6%A5%AD%E9%8A%80%E8%A1%8C
https://zh.wikipedia.org/wiki/%E8%87%BA%E7%81%A3%E9%90%B5%E8%B7%AF%E7%AE%A1
%E7%90%86%E5%B1%80
https://zh.wikipedia.org/wiki/%E4%BA%9E%E5%A4%AA%E9%9B%BB%E4%BF%A1
https://zh.wikipedia.org/wiki/%E5%8F%B0%E7%81%A3%E4%B9%8B%E6%98%9F
https://zh.wikipedia.org/wiki/%E9%81%A0%E5%82%B3%E9%9B%BB%E4%BF%A1#.E6.9C.8D.E
5.8B.99.E9.A0.85.E7.9B.AE
https://zh.wikipedia.org/wiki/%E5%8F%B0%E7%81%A3%E5%A4%A7%E5%93%A5%E5%A4%A7
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8.A6.81.E6.9C.8D.E5.8B.99
http://www.cht.com.tw/aboutus/keyshareholder.html
http://ir.aptg.com.tw/irwebsite_c/Quarterly/
http://corp.taiwanmobile.com/files/investor-relations/financial/TWMconsolidated_104Q1_c.pdf
http://www.cht.com.tw/ir/upload/content/CHT2015Q1consolidatedCH.pdf
http://www.ncc.gov.tw/chinese/news.aspx?site_content_sn=2016&is_history=0
http://law.moj.gov.tw/Eng/LawClass/LawParaDeatil.aspx?Pcode=J0150002&LCNOS=%20%20
%207%20%20%20&LCC=2
https://en.wikipedia.org/wiki/Chunghwa_Telecom