Franchises for selling pre-paid and post-paid connections are offered, by mobile companies, on an exclusive basis. If you have a Warid franchise, you cannot have a Mobilink one, and so on. But it is not clear why that should be so. Franchisers hardly ever know, in advance, what specials a company is going to offer. In fact the companies guard this sort of information till the last second before going even to the press. Each company has so many packages now that it is impossible to conclude which company offers the best package overall: one company might offer a better package to business customers, another to students, a third to rural customers, a fourth to heavy users, the fifth to those who use the mobile or the message service much more and so forth. If we cannot conclude which package is the best, and if franchisers do not know any exclusive information, why should exclusive agreements be tolerated? Another reason usually cited for justifying exclusive tying is when a product has specialised after-sales service requirements. In such cases even courts in the United States have allowed exclusive agreements to stand. But clearly pre-paid or post-paid cards do not have such 'specialised' service requirements. There might be issues of lack of maturity of the market, development of proper information technology systems and lack of sophisticated sales or marketing networks that might be forcing companies to rely on exclusive agreements, but these should then be treated as such and companies, by PTA and the competition authority, should be forced in the right direction over time. It is also interesting that PTA lived with the fact that introduction of number portability was resisted by mobile companies for long and it has been allowed even now under fairly restrictive conditions. Even today the use of the 'towers' of each company are exclusive to that company alone. It is again not clear why that should be so? If sharing use of towers, with suitable rental agreements, could be made mandatory, entry barriers for new comers would come down a lot and expansion of network, across Pakistan, would happen faster. Instead of every company having 40 towers each in Lahore, Karachi and Islamabad, we would have one set across these cities and then companies could go further afield and expand the mobile network at even higher speeds. But PTA and/or Competition Commission of Pakistan (CCP) have not looked at these issues in detail yet, or larger companies have been able to resist moves to change the ground rules. So how have such exclusive agreements survived? Partly the answer has to do with the fact that i). we have started deregulating the economy only a couple of decades ago, ii). we still do not know all the ins and outs of managing competition and deregulated markets, iii). sector specific regulators are still pretty young and have not developed the expertise to regulate effectively and on modern lines, iv). CCP has only recently been constituted and has not yet been given its full power and operational capacity, and, lastly but probably most importantly, v). we are still not taking competition issues seriously enough and do not give them the importance they deserve in making a deregulated economy competitive. But if we do not wake up and smell the coffee, we will have to pay in terms of having a non-competitive industry and business sector and that, in today's globalised and globalising world, would be disastrous. And it is not the case that such issues are restricted to just one industry, service or profession. Competition issues are prevalent across all sectors and they are affecting the business environment profoundly. Newspaper and electronic media groups have anti-labour informal agreements between owners saying that they will not try to woo and hire each others employees. Textile companies force customers to buy 'bundles' of shalwar, kameez and dupattas instead of allowing people to mix and match things, Blackberry instruments work with Mobilink connections only and customers are not warned about this, banks tie up with each other to offer same rates of interest or similar service charges, oil companies are forced to sell petroleum products at the same price even though their efficiency levels might be different but these are not allowed to be passed on to the customers, or possible product variety even, and universities force their students to buy not only education but other goods and services from them on exclusive basis. Schools do the same to their students for stationery even. Doctors have under-the-table exclusive agreements with pharmaceuticals, and laboratories. One can go on citing examples. All of the above and similar agreements and/or arrangements work against open competition. This does not make them illegal or even undesirable per se. But if competition is limited or distorted in anyway, there is a presumption that we should have good counter balancing arguments for us to allow the distortion in competition. And if such counter balancing advantages are not available, we have to ensure that the original distortion is not allowed to persist. Or it will, inevitably, cause loss for the consumers and the country as a whole. Of course those who benefit from such distortions would argue that they should be allowed, and they will even try to argue and demonstrate that such distortions are good for the economy as a whole. But this is exactly why we need both sector specific regulators for large non-competitive sectors as well as the economy-wide competition issues specific regulator in the form of the competition commission. We need independent third parties that can look out for the interest of the consumers, competitors and the country as a whole. Journalist friends tell me that some media groups have an informal understanding between them that they will not woo and hire each others employees. Of course, under some conditions, they do get round such informal arrangements by asking the person they like to resign from current employment before they make a firm offer to them, but under normal conditions, I am told, the agreement worked reasonably well. TV channel A tried not to make offers to people in channel B and vice versa. The groups benefit as they do not have to worry about rising salary pressures. This system worked well when the media industry was small and relatively stagnant. And journalist salaries remained depressed for a long time. But for the last some years, the agreements have become less effective. A number of new groups have entered the industry and fairly aggressively, and since the number of trained journalists is limited, existing journalists, for the moment, are reaping almost monopoly rents on their experience. Today a million or a million and a half rupees a month, as salary from some of the top slots in a television channel, are not unheard of. Some years ago salaries for even senior newspaper editors were less than Rs. 50,000 or so a month. Competition has benefited the workers of the industry. It has benefited the consumers through increased choice. And, in the end, it has benefited the media groups as well as media industry has expanded and the growing pie, like a rising tide, has made everyone better off. But though weaker, the anti-labour agreement survives within some of the older groups. This cartel arrangement is anti-competitive and not good for the industry, the customers or the journalists and should be scrapped. But there are clearly anti-competitive arrangements that might be allowed as they have compensatory benefits. Car manufacturers are allowed to have exclusive franchise arrangements with repair workshops: a Toyota workshop deals with Toyota models only. One could justify this anti-competitive arrangement by demonstrating that i). car repair requires specialised knowledge, ii). this specialised knowledge is the exclusive and proprietary domain of the car company, and iii). this information should not be in public domain (say specifics of Toyota's new engine). Hence exclusivity can be allowed. But, as mentioned, the presumption should be in favour of competition and then CCP should, on a case basis, decide if there are sufficient counter-balancing reasons to allow restrictions or not. Competition is good, for consumers, competitors as well as the country at large. Today's globalised world requires competitive industry. But, as Adam Smith pointed out long ago, commercial interests, whenever they get together, will conspire against the larger public. Whether that is so or not, we need to ensure we have watchdogs to deter opportunistic behaviour on the part of commercial interests. Pakistani commercial arena has too many such examples, given we only started deregulating some time ago. It is time to invest in stronger sector specific regulators and the CCP to ensure they are up to speed to deal with the modern demands and ways of doing things. The writer is an associate professor and Head of Department of Economics, LUMS and senior economic analyst E-mail: faisal@nation.com.pk