Analysis on evolutionary game theory of the collusion and competition strategies between telecom operators

Telecommunication service industry is a typical oligopolistic industry. Telecom operators have a strong interdependence between each other. Therefore, collusion easily occurs in the telecommunication industry, and to some extent, collusion will hinder the long-term development of telecommunication companies. This paper studied the collusion and competition strategies among telecom operators by evolutionary game theory and Hotelling model. The game analysis showed that consumer costs, the level of telecom operators´ service and the fines from government directly affected the strategic decision of operators. Finally, the paper proved that the fines control mechanism of the government was one of the methods to remove the collusion behavior. However only when the fines satisfied a certain amount, could government regulation achieve the function. Then the telecommunication services market can be effectively developed.