Starhub 2007 Details

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Monopoly of starhub:

A lump-sum bid would resolve asymmetry of information between EPL and cable TV operators. StarHub won the rights after a bidding war with SingTel and ESPN STARSports (ESS). They realised that it’s a monopoly where consumers are left with no choice, simply because StarHub is the only cable TV provider. Them packaging all their services together in a bundle was a very smart move, by doing so, they could increase their market share. The increase for the sports package was much higher , and the reason as per Starhub was ‘it would not be fair for non- sports fans to be affected by the escalating sports costs’. The “hidden” but the most obvious reason for this was that the ardent sports fans in Singapore would eventually end up paying the huge prices, when they are left with no other choice. After the strategic acquisition of Singapore Cable Vision, StarHub gained the upper hand. Besides gaining a direct line (the cable service) with nearly every household in the country, this pipeline they have to each household possess greater capabilities compared to it's archaic copper wire counterpart. Starhub worked out their moves on the simple basic principle” Price is directly proportional to demand”. Winning the bid made sure that they were the only providers. This could have been avoided if other cable tv operators had bid for a lump-sum amount which they would have been able to convert into profit as Starhub rightly proved. This would also avoid not supplying good service and often ignoring its subscribers' requirements or interest which is bound to happen because of no competition. The absence of other providers in the market would imply that the consumers are not receiving the maximum possible utility for their purchases.
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