Positive And Negative Externalization Of The Mobile Phone Market

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Today, there are over 6 billion people in the world. Out of those 6 billion people, 4.6 billion people have access to a cell phone/ telecommunication device. Technological advances has allowed the cell phone market to flourish and grow since the late 20th century. In fact, in the last 20 years cell phones have evolved from landlines to smart phones. While there are many effects from the growth of the mobile phone market, it is important to observe and analyze the positive and negative externalities on which the mobile phone market presents to both producers and consumers. The cell phone market has grown in the past few years, many firms have entered and exited the market. Once a highly competitive market is now condensed to four main telecommunication…show more content…
This makes smaller firms unable to compete on a wide scale, signifying a high barrier of entry. The scale and reach of Verizon, Sprint, AT&T, and T-Mobile is difficult to compete with as they transform the mobile phone market from highly competitive to mostly oligopolistic as the maintain at least 90% share of the market. (Shown Below) What exactly does this mean? It means that the mobile phone market is highly concentrated between 4 wireless companies that successfully survived competition while also forcing smaller firms to exit the market or merge together. The market is fierce despite the 4 major companies compete to sell the same phones along with similar cell phone data plans and coverage. Understanding the positive and negative externalities of the cell phone market allows us to easily understand the transformation of the mobile phone…show more content…
They determine whether firms or markets fail or succeed. By studying the costs and benefits presented by externalities helps measure economic efficiency in terms of economic price. Positive Externalities generates benefits on a nonparticipant in a market transaction. In the mobile phone market, there are three main positive externalities that are prevalent: (1) faster and more private communication; (2) Constant internet access; (3) Easy to Use. All sorts of people from around the global are now able to communicate from different regions within mere seconds/minutes. Moreover, this also contributes to the rapid globalization in the past century. As more and more people are connected to the World Wide Web, information and ideas are easily able to be disseminated to billions of people.Constant internet access allows a reliable way to access a global repository of knowledge that is the Internet. Sure, not all phones have data coverage nor do all phones offer unlimited talk and text, however they do allow people to easily communicate with one another rather than slower methods. Fierce competition between the major phone service providers have introduced new plans for consumers. Cell coverage and date are often advertised as better than their competitors, claiming to reach farther and faster at a price typically lower or more attractive. Insurance and cases have become prevalent in the
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