Quote:
Originally Posted by GGG
To clarify, the argument for the privatization of "essential" services is that a private company can deliver the essential good with better service and at a lower cost and the competition motive will result in a lower cost to the consumer. Generally I agree with this. However in the case of wireless and cable companies this has not occurred. The best wireless providers in Canada in terms of service and cost seem to be the government owned ones. And in provinces with government owned telcos rates are lower for cable and phones.
If the general rule that private companies are more efficient then the bell/telus/rogers conglomerate should be able to force sasktel into a money losing position and cause it to fold. Instead Sasktel out performs them in terms of subscribers.
|
Private companies only drive down costs in an environment where there is a high level of competition pushing down profit margins because they are better at streamlining and process changes than government organizations. When you have a very small number of players in a market, competition is low and private companies have very little incentive to actually change or streamline in order to improve services. This really changes the private company's focus to maximizing profits instead so much so that a crown corporation would actually perform better for the end consumer.
There are so many examples of this from the cellular market and not too long ago the energy/power distribution/generation deregulation in Alberta. It's the whole private companies are not good for the consumer for things with inelastic demand or low elastic demand. i.e. energy, health care, cellular (unless you increase the competition)