Currently the largest telecommunications companies have based their business strategy with an emphasis on bundling or bundling services. The issue is of public interest since the Fiscalía Nacional Económica (FNE) will ask Tribunal de la Libre Competencia (TDLC) to rule on any distortions that may arise in selling the triple or quad packs by the companies and requested that establish conditions under which operators of telecommunications services market these packages to the public.
In this sense, the study of the engineer of the Network Economics and Risk Analysis Laboratory of CMM, Juan Pérez, becomes very important. His work on Optimal Bundling of telecommunications services is developed within the framework of his PhD thesis in Systems Engineering, and whose advisor is Alejandro Jofré.
As the engineer explains, most research has focused on how the packaging of products or services affects competition, regulatory matters and general economic analysis. To a lesser extent, other studies have been based more on the definition of models and methodologies to set prices for multiple products or packaged products. It is this last line that Pérez turned his research and the results were released in two seminars attended by executives of Entel and Movistar.
Pérez's work proposes a model that, in addition to price, defines maximum amounts to be offered in the package or plan. “In the modeling parameters are used as actual cost functions, customer segmentation and corresponding representations of utility functions,” he says.
The model proposed is non-linear optimization and considers the constraints of network capacity, maintenance costs and launching new plans. It also includes the addition of new customers, plan changes and the possibility of an expansion of network capacity.
During the seminars, attendees asked about some aspects of the research, mainly in the aforementioned application of this model to a real company. They were also very interested in the impacts and possible evaluations aimed at economic regulation.
The importance of defining service prices
Among other measures, the FNE determined what should be the minimum conditions to be met by all packaging services, within which stresses the need to report separately the market price of the services. In the view of Alejandro Jofré, this would prevent firms from using the packs as a predatory strategy or barrier to entry. “Within a four-packing services, the company can leave, for example, the price of the phone very low and this would make it impossible for other companies in the industry to enter the market and to the ones that already exist, leaving them with no chance to compete.”
Pérez explains, the model developed allows calculating prices in the form of fixed rate, which can be defined in order to recover either total costs or variable costs. “The price of each of the services separately, the price of the pack with all the services together and the savings can be estimated from the model. This does not only depend on technology to deploy enterprise-with their supply costs, but also demand and customer preferences, among other things. “
The meetings in which this work became known were conducted between June and July and were attended by, among others, Patricio Cáceres, Regulation Manager of Telefónica, Claudio Lorca, consultant of Regulation Management of Telefónica Pedro Suarez, Head of Regulation and Projects of Entel PCS.
