The telecommunications in China has been showcasing significant growth with the passage of time. For the purpose of conducting the assignment in an appropriate manner, China Mobile Limited, which has been effectively serving in the Telecommunications sector for more than twenty years, has been chosen.
Serving the telecommunications sector for a long span of time, it has to be noted that the company has been catering its services to various nations such as Australia, Pakistan, United Kingdom and Mainland China. Hence, to conduct the operations in a smooth manner, the company comprises of more than 4, 00,000 staffs.
The headquarters of the China Mobile Limited is in Beijing, China.
Identify any legislative regulatory framework/s affecting the MNC you have identified operating in Australia and discuss why and how it affects the company
As mentioned above, China Mobile Limited has been efficiently running its business over many nations, including that of Australia. However, in order to conduct their business in an efficient manner, it becomes extremely necessary for the organization in context to comply with certain laws and legal frameworks. In Australia, it has to be noted that the companies serving the telecommunications sector have to comply with the Telecommunications Act, 1997. In addition to the same, it has to be noted that the companies also need to ensure that they are following the provisions of Acts such as the Telecommunications (Consumer Protection and Service Standards Act). As China Mobile Limited is a foreign based company, they need to keep in mind the Australian monarchy has always been supportive towards the local companies that cater their services in the telecommunications sector (Info.dfat.gov.au, 2018).
Under the recent amendments brought in by the Acts in contexts, it has to be understood that the Australian telecommunications sector is gradually shifting from a monopolistic situation where the government of the nation has been the key driving force, to a scenario where the private organizations are competing for getting shares of the market. While this is a major advantage for the companies that are serving the sector in the nation, it has to be noted that the situation is still under a phase of change. It is not known by anyone as to when the process of this shift shall end (Australian Treaty Series 1979, 2018). Rather, it can be stated that the same shall be effectively dependent on the development of technology and in turn, the costs that the consumers have to pay for acquiring the services of the companies.
As of now, it can be stated that the private players such as China Mobile Limited, which have been trying to establish a firm standpoint in the Australian market have had to struggle to a certain extent due to the unrealistic competition from the government of the nation (Communications.gov.au, 2015). It has to be understood that in the case of government, the same has been setting up fixed particular costs at various stages, which needs to be followed and implied by the companies serving the telecommunications sector.
Even though it is advantageous for the consumers residing in Australia, it has to be understood that due to the said reason, there have been many companies which have had to incur losses. The major reason for the same is the fact that the raw materials and other components that play a crucial role in the development of the sector incanted are available to the government at prices that are comparatively lower than the prices with which, the privately owned firms may buy the same (ACMA, 2018).
For instance, it has to be noted that optical fibres that have brought in a major revolution in the sector are available at very high prices. It has to be noted that while in the case of government, they can afford to implement the usage of the same and yet charge less from the consumers, since the scope of availability of services at lesser rates come into play. However, in the case of the privately owned companies such as the China Mobile Limited, Vodafone and others, they have to face major problems while using the scope of technologically advanced devices and components (Park, Yang, & Lehto, 2007).
Due to the provisions of regulatory pricing and others that restrict the companies from charging more than what is stated by the government, it can be stated that they often fail to make major profits and benefit significantly from the revenues brought in. To be precise, it can be stated that the difference between the amount of investment and amount of revenues remains extremely low. For the said reason, to operate in such a market scenario, it requires significant capital and capacity to run the businesses on a long term basis, despite fine lines between investment and returns.
Park, J., Yang, S., & Lehto, X. (2007). Adoption of mobile technologies for Chinese consumers. Journal of Electronic Commerce Research, 8(3).
Chong, S. C., Teoh, W. M. Y., & Qi, Y. (2015). Comparing customer satisfaction with China mobile and China telecom services: An empirical study. The Journal of Developing Areas, 49(6), 247-262.
Crowe, D. (2018). Phone users set to foot the bill amid fears over China tech power. The Sydney Morning Herald. Retrieved 30 August 2018, from https://www.smh.com.au/politics/federal/phone-users-set-to-foot-the-bill-amid-fears-over-china-tech-power-20180323-p4z5y4.html
ACMA . (2018). Introduction to the ACMAs purpose |. Acma.gov.au. Retrieved 30 August 2018, from https://www.acma.gov.au/theACMA/About/Corporate/Authority/introduction-to-the-acma
Communications.gov.au. (2015). Rules for carriers and service providers. Retrieved 30 August 2018, from https://www.communications.gov.au/policy/policy-listing/rules-carriers-and-service-providers
Info.dfat.gov.au. (2018) Treaties. Retrieved 30 August 2018, from https://info.dfat.gov.au/Info/Treaties/Treaties.nsf/WebView?OpenForm&Seq=7
Australian Treaty Series 1979 (2018). Retrieved 30 August 2018, from http://www.austlii.edu.au/au/other/dfat/treaties/1979/4.html
Chinamobileltd.com (2018). Retrieved 30 August 2018, from https://www.chinamobileltd.com/en/ir/reports/ar2007.pdf
Pc.gov.au (2018). Retrieved 30 August 2018, from https://www.pc.gov.au/research/supporting/telecommunications-issues/teleeco.pdf
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