Astro, the only pay TV firm in MALAYSIA?

As seen in Malaysia, Astro is one of the pay TV operator with the given license for 20 years. This situation is different from the other countries with has different operators which are offering with different types or rates. By comparing India with Malaysia, there are tv operators in India offering up to 155 channels at the price RM9.17 whereas in Malaysia, Astro is only offering 3 mini packages which include 55 channels at the price RM 64.61. However, Astro subscribers have to pay last payment charges, reinstallation charges and servicing charges. Other than that, Astro repackaged and increase the price every 2 years.

What is monopoly? Monopoly is a market structure which a single firm produces a particular goods and service. There are few types of barriers to entry such as patents/copyright, economies of scale, large initial investment, government directive and ownership of scarce raw materials. Based on this article, Astro monopolize the market of pay TV operator in Malaysia. Astro is the price maker and there are no competitors. This gives a disadvantage to the customers where they are not allowed to change to another firm because there are no close substitutes in Malaysia besides Astro. It is used to have competitors but due to the poor services that the other firms provide, they are forced to shut down the company. Besides that, Astro keeps potential rivals by setting barriers to entry where Astro has a license from the government which are strictly prevent other firms from entering the industry.

What will happen is Astro continues to monopolize the market?  If Astro continues monopolized the market, there are going to be lesser and lesser viewers. This is because they have the ability to raise its price without losing the demand of its product. Moreover, customers have a lower income rate could not afford the price of TV packages which are set by Astro. With that, Astro will make a lesser profit compared to the previous year. However, the government should open up the market and give more licenses to other operators so that there will be healthy competition. By doing this, there will be benefits for the consumers as they will have more options. Thus, consumers are able to subscribe to different operators which provide different types of programs. Unlike phone companies where they are oligopoly competition, the customers will be able to switch to another company once they are not satisfied with the current one. To wrap up, there should more pay TV operators so that there will be a good economy of the country and more job opportunities for the people.

Reference of article: http://www.consumer.org.my/index.php/development/private-sector/479-astros-monopoly-has-short-changed-malaysian-tv-viewers
 

Prepared by: Lim Kye Lyn

 Student ID: 0311892