Oligopolies in Malaysia

Oligopolies are when few companies dominate the markets in the country. In the UK supermarket industry, Tesco, Sainsbury and Asda own the market there. In Malaysia, the perfect example would be Maxis, Celcom and Digi who dominate the telecommunication market. One of the components of a market that is oligopoly is that the giants fiercely compete on the price, so they can try to attract a larger share market than their competitors. This could be said as having price wars, for example, in 2012, Maxis introduce a cheaper prepaid and IDD packages amongst the foreign workforce with appealing price rate but Celcom, launched the Celcom First Voice Plan to assist the group broaden its subscriber foundation. Therefore, Maxis, Celcom and Digi are 3 large companies mainly just rivaling one other in the telecommunication market with rarely any regards to other telecommunication companies like U-mobile. This is considered as oligopoly.  However, in some rare cases, the 3 companies would decide to cooperate with each other instead of competing. One of the main reasons they would decide to cooperate is to assume their control on the market and benefit from supernormal profits in the long run. This will lead to inflation. Other than that, the rivals would also choose to work together to prevent new companies to enter the market, as well as there are high entry barriers which is caused by the copyrights, patents of the companies, advertisement and the economies of scale.