Assessing impacts of competition experience from odi research
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Assessing impacts of competition – experience from ODI research. Karen Ellis Head of Private Sector & Markets Programme, ODI. Project assessing economic impact of competition and related policy. Policy context & market environment. Degree of competition. Market outcomes. Countries:

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Assessing impacts of competition experience from odi research

Assessing impacts of competition – experience from ODI research

Karen Ellis

Head of Private Sector & Markets Programme, ODI


Project assessing economic impact of competition and related policy

Project assessing economic impact of competition and related policy

Policy context &

market

environment

Degree of

competition

Market

outcomes


Countries and markets analysed

Countries:

Bangladesh

Vietnam

Ghana

Kenya

Zambia

Markets:

Sugar

Cement

Mobile phones

Beer

Countries and markets analysed


The sugar market

The sugar market


Comparing efficiency average sugar production tonnes produced per hectare of sugar grown

Comparing efficiencyAverage sugar production (tonnes produced per hectare of sugar grown)


Sugar retail price usd kg at ppp rates 2007 figures

Sugar Retail Price (USD)/kg at PPP rates (2007 figures)


Cement market structure

Cement market structure


Retail cement price per 50kg bag in us 2007 8 figures

Retail Cement Price Per 50kg Bag (in US$) , 2007/8 figures


Cement percentage change in price between 2007 and 2010

Cement: percentage change in price between 2007 and 2010


Mobile telecoms benefits

Mobile telecoms benefits


Mobiles market average per minute mobile tariff 2007 figures in usd

Mobiles marketAverage per minute mobile tariff (2007 figures in USD)


Zambia s international gateway problem

Zambia´s International Gateway Problem

  • Only one international gateway exchange operated by monopoly

  • State charged v. high price for international gateway licence

  • $18 million, compared to $214,000 in Kenya & $50,000 in Uganda

  • Drove up prices and distorted whole mobiles market, increasing the costs of doing business in the country.


Peak rate 1 minute call to the usa in 2007

Peak rate 1 minute call to the USA in 2007


Average per minute mobile tariff 2007 figures in usd

Average per minute mobile tariff (2007 figures in USD)


Director for mergers and monopolies at the zambian competition commission

Director for Mergers and Monopolies at the Zambian Competition Commission:

‘Many times it becomes very difficult to actually show the benefits. Of course, a report like this makes it much easier to advocate to the government. With our persistence, we kept going to the government and highlighting the benefits of competition, showing them the statistics as such a report has done. And eventually we have gotten through to the government. And the fee for the international gateway has fallen ...’


The impact

The Impact

  • June 2010, Govt reduced license fee to $350,000

  • Licences awarded to the 2 private operators

  • Within 1 month, both private operators reduced international tariffs by 40-80%

  • “I think it’s a huge benefit to the Zambian consumers and also to the business community.” (Director of Regulation, ZICTA)


Assessing impacts of competition experience from odi research

Thank you

[email protected]


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