Friday, October 05, 2007

"I'm Switching to...."

Over at Manolo's Free Burma thread, there is a side-discussion on quality of services received from local Telcos. I responded to fellow commenter Ramrod's remark "Okay, I’m switching to Globe!". Unfortunately, the moderation software is currently holding it so i'm reposting here:

"Ramrod, i’m not sure how much switching to Globe will help. Although in theory, telco deregulation which brought about competition would lead to better service, Albert Hirschmann (in his Exit, Voice & Loyalty) wrote about a situation where competition leads to poorer service compared to a monopoly.

He uses the elements ‘exit’ (equivalent to apathy or in your apt words ‘learned helplessness’ and expressed as switching to the other provider) and ‘voice’ (as manifested in customer complaints).

What happens right now is those disatissfied with Globe go to SMART, those disatissfied with SMART go to Globe etc. etc. Net effect of this churn is that the telcos don’t hurt enough to improve their service.

Contrast that with a situation in which there is only one provider (i.e. a monopoly) and the only alternatives for the consumers is to complain, ‘grin and bear it’ or do without phone service. Hirschmann says that in this scenario where a phone is almost a basic necessity, the consumers will have no choice but to eventually complain with the result that a government (assuming it is responsive to the people), will have to take action.

Of course Hirschmann takes it as a given that the government is not populated by the likes of GMA, Abalos, Neri and the like in which the result would be more like what we are seeing now. But he can be excused because he is not a Filipino.

Incidentally, you can apply the above dynamic to Philippine Education and the OFW phenomenon..
To summarize, there are situations where exit is not a threat and voice is weak. This results in perpetuating poor service, whether in telcos, public education or governance.

1 comment:

Prince Heinell said...

The funny thing is, some are using the Globe/Smart sucks argument to push for NBN. These people don't get it - NBN is for government's use, the people will not directly benefit from it. Unless, of course, the gummint starts a new telco.