Tuesday, January 8, 2008

Competition... Does it exist in Singapore?

Competition means 2 or more parties (companies) acting INDEPENDENTLY to secure the business of a third party (customers) by offering the most favorable terms.

So by definition companies should actually try their best, offering their best prepositions for us (customers) to choose but is this what is happening in Singapore. Their decisions to price their offers should not be affected by other companies offer BUT should be in the best interest of the customers. Or at least i personally think it does not happen the way it should be. So are we getting the best offer for what we are paying for or what we elected for?

We see a lot of examples, for example the telecommunication industry. It used to be only Singtel in the past (10?15? years back) offering customers telephony and internet service. Then few years back, the government decides to deregulate the industry to "increase" competition and up sprang M1 and Starhub to challenge Singtel. At the start it was good, we had more services (incoming call free??) offered to us and different way of charging (per second billing) that made our bill lower. Therefore Singtel had no choice but to come up with better offers and that is what competition does.

But after a few years, the competition suddenly became stagnant. Companies started to offer the same price plans and service and price them at almost exactly the same price as their competitors. YES we occasionally get "upgrades" but actually those are just paper upgrades as we still get the same shitty service.

Let me offer another example that has been making quite a lot of hoo-haa recently. Taxis used to be provided by Comfort and Yellow Top Cab only in the past. Only until a few years back then we see Premier, SMRT, etc coming in to "increase" the competition. But in view of the current raise in taxi charges, we once again see that competition does not exist.

When comfort adjusted taxi charges to "solve" taxis supply and demand, instead of taking this opportunity to show us that they will offer us something better, the other companies decided to follow with the adjustment and left us the customers to fend for ourselves.
They gave us quite a few reasons such as increasing cost, the need to reduce subsidies etc. This even after they continue to post healthy profits year after year. This is definetely wrong.

It is sad to point out that these companies behave more like a cartel instead, signing a peace treaty to control market prices and thus limiting the need for competition among each other.

I don't even understand why many singapore brands/services are labelled as world class when they have a lack of competition domestically to even prove they are one. The only

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