The motive for managing anti-competitive practice is both political and economical. From an economic perspective concentration allows inefficiencies, eliminates small evolving businesses and negatively affects consumers. From a political view, economic concentration can be converted into political power , which can be used for abusive objects including securing preferential treatment from legislators or accessing decision making forums.

In an environment where a license is required for the provision of service, the regulator is able to determine the degree of competition and market size. At the same time the regulator is also able to guide the behaviour of the competitors. Consequently it is important that regulators promote the principle of fair practice for the benefit of the market.  Anti-competitive practices can harm market integrity as well the reputation of regulators. However some countries, including South Africa, have opted to transfer the anti-competition monitoring activity to a separate agency, which investigates and presides over unfair practices such as excessive pricing, obstructive collusion, and aggressive takeovers or mergers. 

Different aspects of anti-competitive behaviour are managed differently by different authorities.  Merger reviews are managed mostly by competition authorities.  In some countries ministerial input into the process is required, in others additional measures such as merger legislation is available to merging companies.  Examples of the latter can be found in the United States where commissioners have to

• define their markets 
• list the firms participating in the market and their market shares
• list possible adverse effects of the merger
• analyse barriers to market entry
• evaluate possible efficiencies arising from the merger (ITU, 2002)

After conducting required research and investigations: the competition authority may undertake to prohibit the merger, or enforce divesture or provide conditional approval.  A review of some of the European Union's decisions has shown that all three options were applied in different merger cases between US and European companies.  Of the three options conditional approval remains the most cumbersome because it requires constant monitoring of implementation.

6 Determine market structure

Commentators usually refer to three types of market structures: monopoly, duopoly and oligopoly.  Monopoly is associated with traditional market structures, where one supplier supports the whole market to the extent that it determines output (number of telephone lines, subscribers and bandwidth) as well as price.  During the early phases of liberslisation and market restructuring in the United Kingdom, the notion of duopoly became fashionable. Duopoly is said to be establsihed when two operators are permitted to determine output and price in a market.  There is generally little competition between duopolies, as evinced in South Africa and Botswana where the prices and service of the two mobile operators have remained similar despite competition.  Oligopolies emerge when few companies control out-put of a commodity, limit price competition, maintain barriers to entry and generally mainatin high prices and profit levels, as in the case of software companies. 

There is no natural transition from one type of market structure to the next.  Experience has shown that the number of entrants should generally correlate with market size, if there are too many firms in a small market, then some firms will soon collapse.  It is important that regulators conduct market analysis before planning and implementing a liberalisation strategy.  The number of licences they issue, suspend and revoke in the market impact on the market structure and growth.  It should be noted however that in the telecommunications environment, the market is not only defined in geographic terms.  Markets are also defined in functional terms; there is a market for the end product (telephony services to customers) and another for the intermdiate (resale segment).  Today regulators are further challenged by the complexities introduced by convergence, which has played havoc with the notion of segmented markets.  Ultimately, regulators will need to work more closely with operators if they hope to manage evolving convergence. 

Regulators in developing countries in particular also need to consider creative means of fostering the developemnt of smme's (small medium sized enterprises) as they shape their individual liberalisation strategies.  The difficulty of restructuring markets in order to create smme's where public operators are dominant is best illustrated in South Africa, where legislation was required to usher the entry of new service providers.