Abstract:

The telecommunication industry is of economies of scale, but the scale of users is not the bigger the better The paper first constructs the cost function of telecommunication industry, then analyzes the data from the year of 1978—2009, drawing up the developing trend diagram of economies of scale over the last 30 years, and found that the telecommunication industry is close to the area uneconomic This paper also discusses the reasons, as well as puts forward the corresponding policies Meanwhile, there are some points of the developing trend diagram of economies of scale corresponding to the developing path of telecommunication industry, which reveals some disadvantages of the reform and developing path, such as redundant construction and cut-throat competition

Key words: economies of scale, split and restructuring, translog cost function, redundant construction, telecommunication industry