Is five too many? Simulation analysis of profitability and cost structure in the Korean mobile telephone industry

Abstract

Four new nationwide entrants were introduced into the Korean mobile telephone industry provoking intense competition among the five carriers by late 1997. Some assert that there is excessive competition and industry restructuring is needed. In this paper, we analyze the profitability of mobile telephone carriers and the degree to which cost is reduced through M&A, thereby obtaining principal information on the economic incentives for industry restructuring. (C) 2001 Elsevier Science Ltd. All rights reserved.