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Weigh the costs and benefits of creating monopolies

A widely held view, spanning various network-based sectors such as electricity, water and now natural gas, is that distribution of these services is a natural monopoly. However, this view needs to be examined in the context of the maturity of the existing distribution systems, their coverage and age. The telecom sector is an outstanding example of competitive distribution wherein multiple service providers have rolled out their network infrastructure to provide competition. Of course, the number of competitors varies across distribution circles. The underlying premise in the way that this sector expanded was that the economics of the business was linked to both the size of the system as well as the intensity of customer loads!

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