International trade strengthens competition in imperfect domestic telecommunications markets by opening them to goods and services from foreign operators and equipment suppliers. Extra competition reduces the market power of domestic producers, so that they are less able to make abnormal profits. Trade encourages countries to specialise in the production of goods and services where they have a comparative advantage, resulting in a more efficient use of resources and shared gains among the trading countries. Countries, companies and individuals have finite resources. The decision to use part of them in one way precludes their use in another. In the theory of international trade it can be shown that where markets are fully competitive, national wealth is maximised by specialising in products where the nation has the greatest lead, or comparative advantage, over its competitors.
International telecommunications, Page 1 of 2
< Previous page Next page > /docserver/preview/fulltext/books/te/pbte041e/PBTE041E_ch17-1.gif /docserver/preview/fulltext/books/te/pbte041e/PBTE041E_ch17-2.gif