Strategic planning for long-distance telecommunications: A symbiotic production system

Telephone services and other forms of telecommunication services involve a form of production with peculiar characteristics. In this paper a symbiotic production model to analyse international telecommunication market is introduced and, using conjectural variations, the carriers strategic behaviour in a growing competitive pressure market is formalized. The effect of competition is analysed both between carriers in the final market, and in the intermediate market in which carriers compete over tariffs to get an appropriate distribution of profits. The obtained results show the firms have an incentive to cooperate or to collude depending upon the conjectural variations and individuate some policy implications for the international telecommunication market.