Necessity to Subsidize Electricity Bill for Defining Telecommunication Network of Small Players in the Telecommunication Market

Unlike bus and rail operators, the nature of telecommunication service meant that small players in the market cannot start small. Specifically, a 4G telecommunication line for voice call and short message service must work everywhere in the defined geographical locale. This means that whatever the size of the client base, the telecommunication player must define the telecommunication network for the entire geographical region. This necessarily incur cost due to the electricity bill involved. Hence, this creates a network effect externality defined by the imbalance between the client base and the amount of resources needed to service this client base. In the telecommunication market, larger player uses the same network as small players, but they reap the benefits of network size effect. To have a competitive and healthy market, governments need to consider subsidizing the electricity bill of smaller players to help them break even in the utility cost segment. Overall, help is needed for smaller players in the telecommunication market to pay for the electricity bill needed to build a network to service its small client base over the entire geographical region that it operates. This will likely be in the form of electricity bill subsidies from the government, which helps ensure a more competitive and fairer telecommunication market which is the key ingredient for innovation in products and services