Abstract: New concepts of “indivisibility” and “divisibility” are put forward accordins to the stud of the nature of network systems, and the nature of natural monopoly of network industries is well demonstrated by combining these new concepts with productive and allocative efficiency respectivelyBased on these conclusions, a binary dimensional framework is established to demarcate the boundaries of natural monopoly in network industries and four new characteristics are summarized

Key words: divisibility, networkindustry, naturalmonopoly, productiveefficiency, allocativeefficiency