Can There Be Too Much Competition In Developing Nations?
By Mike Masnick, Wed May 04 23:45:00 GMT 2005

As the Afghan government looks to sell more cellular licenses, some are questioning whether or not there's going to be too much competition. Of course, that's a problem for the operators, not the regulators.


In some ways, it's almost amazing that this discussion is even taking place. It wasn't long ago that using a mobile phone in Afghanistan was basically impossible. However, with the rebuilding of Afghanistan, plenty of people have realized that communications infrastructure is key -- and so, mobile services are in demand. Given the rapid success of mobile phone service in neighboring countries, it shouldn't come as a surprise that there's plenty of demand for such services.

However, with the government now looking to sell new license for two new operators, some are worrying that there's going to be too much competition, which could strangle the burgeoning market for mobile phone service in the country. Obviously, the comments need to be taken with a grain of salt, as they mostly come from a competitor already in the space, who is worried about the impact of increased competition on his own business. The warnings he gives of the difficulties a new operator faces are probably accurate, but it should be up to the operators to decide whether or not that risk is worth taking -- not the government.

It all becomes a business decision for the operators in the market. If they think there's already too much competition, then the licenses won't sell for quite as much money, and the market should regulate itself. While, certainly, plenty of other nations have shown that costly licenses can stall mobile growth, things do seem to even out over time -- and one thing that is clear, is that where there's capacity, applications find a way of filling that capacity. For example, the recent example of Kenyans using text messaging to find jobs shows that new applications can rise up to solve different problems. It's unlikely that anyone set up a cellular network with the idea of running a job service, but that's what happened.

Therefore, while it may challenge the business minds who run the various operators, it's likely that the end result of the increased competition will be more usage and more creative and innovative applications and services for the people of Afghanistan. In the long run, that's a good thing.