Astro's Monopoly in Malaysia

Does anyone know what Monopoly in Market Structure is?  Among all the market structure, Monopoly will be the most interesting part. Monopoly is which there is only a firm that producing products and services.  It would be high barriers that could protect the firm from prevent other market to enter and due to that, there would not be any substitutes and that’s why it make the product is unique.  Is Astro still a monopoly firm since nowadays we have Unifi?

  

Unifi, under TMnet not only provide wireless line but also provide drama and shows named HyppTV. Particularly, the number of shows and drama provided by both the firm are totally different. Unifi focusing on providing wireless line while Astro is the firms that focus on channeling TV shows. Astro is also a natural monopoly. A natural monopoly is an industry that single firm production that good or services that is more efficient. The natural monopoly market structure in Malaysia is Astro.  Astro Malaysia Holding Berhad is a leading unified consumer media entertainment group in Malaysia and Southeast Asia. Over 130 million or 52% penetration of Malaysia TV households, Publication and Digital Media.  It could be stated that Astro has hold a big market in channeling hundred of TV shows in Malaysia.    

 Astro Malaysia Holding Berhad would affect Malaysia in many ways for example like it would be an extra income for the country such as government tax. To attract the consumer, Astro comes out with many promotions that would be cheaper than the usual price. For example like Super pack 1, super pack 2, super pack 3 and super pack 4. Super pack 4 only cost RM 125.00 that valued RM 199.95 and plus 6% government tax.  In addition, there would be many exclusive channels for news, kids, learning and variety such as discovery, Disney channel and celestial movies. When it is on promotion, more consumers will purchase it because it is reasonable that the amount we need to pay for 160 channels.   

The advantage of monopoly is earning high profits. Astro enjoy high revenue as high as RM3.2 billion. Astro also enjoy the benefits of economic scale as well. However, the disadvantages of monopoly are incentive and innovate. Malaysia viewer knew that when raining fade it would be a big problem for subscribers as the signal is not stable and we could not watch the TV shows.

In conclusion, monopoly firm had been protected by government by introducing barriers. In my opinion, it would be more effective to have only one firm than having more than one firm to compete with each other.

Written By : Loh Jing (0315615)