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Mobile Operators: Creating Artificial Demand For Capacity?

Posted by Unknown on from the so-that's-why-i-keep-paying-more-for-less dept.

An anonymous reader writes with an excerpt from Broadband Convergent: "We all have been taught the basics of supply and demand since high school. If demand is high, prices rise. If demand is low, prices fall. Simple, but true; yet this concept can be manipulated artificially if, as seen with the latest projections of mobile operators, that higher demand means higher prices. Are the dire predictions being promoted by operator's a true demand, as we have been told, or capacity hoarding that will lead to artificially higher prices and more profits for the mobile industry?" The gist seems to be: operators have no incentive to maintain good infrastructure because it costs money and the artificial scarcity of capacity allows them to charge more.

2 of 268 comments (clear)

  1. An old, old story by binkless · · Score: 4, Interesting

    In ancient Rome, they would always say that food prices were too high, and there were ships full of Egyptian corn offshore, just waiting for the price in the marketplace to rise.

    During the seventies the rumor was that Sixty Minutes had film of tank trucks of gasoline being dumped in the desert to keep prices high.

    Now mobile providers are holding back on capacity in order to raise prices.

    Sound familiar?

  2. Re:Competition by AngryDeuce · · Score: 4, Interesting

    This is especially true with services that have such a high barrier to entry, like mobile.

    How long is it going to be before everything has a high barrier to entry? That's what I'm wondering. I mean, we're already at the point now where companies like Apple are able to severely weaken, if not outright kill off, their competition just because they can basically use the insane amount of capital they have to corner the market on necessary raw materials and force out competitors at the manufacturing stage.

    As these companies get larger and larger and larger, it seems like no matter what market we're talking about, eventually it's just going to be impossible for anyone to compete unless they're sitting on the enormous capital that the established players are, and how will they ever get that enormous amount of capital in the first place if they can't even enter the market?