Assessment of the Conduct, Structure, and Performance of the Philippine Telecommunications Industry
An application of the Structure-Conduct-Performance approach on the nationwide Philippine telecommunications industry, for the period 2011 to 2016, showed that the market structure is highly concentrated, with significant barriers to entry, such as capital, regulatory, and legal requirements. These entry barriers lower market contestability, or the threat of a new entrant challenging the incumbents. Nevertheless, the incumbents foil each other from exercising excessive market power of raising prices, or reducing service quantity/quality. Market structure strongly influences the incumbents’ conduct, with the two players mirroring each other’s strategic behaviors, particularly in terms of product and pricing, and service quality. Both market structure and incumbents’ conduct impact the market performance, with industry EBITDA margins, return on equity, and return on assets having been healthy.