Regulating Telecommunications in Developing Countries: Outcomes, Incentives, and Commitment (original) (raw)
World Development, 2005
We investigate the determinants of regulatory reforms during 1990-98 in 50 developing countries. We find that the reforms are attributable to differences in the configurations of interest groups and in the political structure-in particular, the decision-making mechanisms and the ideology of the legislature. Regulatory reforms are more likely in countries with strong proreform interest groups (a larger financial sector and a greater proportion of urban consumers) and less likely in countries where incumbent operators have already made large investments and hence have strong incentives to oppose the reforms. Democracy facilitates the actions of interest groups.
Telecommunication Reforms in Developing Countries
Communications & Strategies, 2005
Major innovations have pushed telecommunication costs down and demand up since the mid-1980s. The new segments of the mobile and the internet markets are hence suitable for oligopolistic competition. Reforms of the former public monopoly have been necessary to accommodate the entry of new operators. It is important to disentangle the effect of market liberalization that occurred in response to technological change and demand growth from the effects of privatizations resulting from structural adjustment programs. In line with popular opinion, privatization per se did not benefit consumers much. The biggest improvements for consumers have been driven by competition from mobile telecommunication firms. Governments should concentrate on liberalizing the mobile and internet segments. For the incumbent telecom operator, allocative inefficiency combined with the critical budgetary conditions found in most developing countries favour public ownership. This is an effective way of combining the regulation of the firm with a maximum level of taxation.
What is the efficient cost of providing telecommunications services to a certain area or 22 type of customer? As developing countries build up their capacity to regulate infrastructure 23 monopolies, cost models are likely to prove increasingly important in answering this 24 question, but without information no real answer can be given. In this paper, we will 25 introduce cost models and establish their applicability when different degrees of information 26 are available to the regulator. Reliable and detailed information is generally a scarce good in 27 developing countries, and we establish here the minimum information requirements that a 28 regulator needs to implement a cost proxy model approach, showing that this 'data 29 constraint' need not be that binding.
Telecommunications development: policy recommendations for developing countries
1996
ABSTRACT Reform of the telecommunications sector has been a worldwide policy trend since the United States, the United Kingdom and Japan drastically reorganized their domestic industries in the early 1980s. Competition has been introduced into a previously monopolistic telecommunications market by many developing as well as industrialized countries. In earlier periods, however, telecommunications monopolies effectively developed national telecommunications networks.
Utilities Policy, 2007
This paper studies the relationship between regulation and performance in the mobile telecommunications sector. The analysis takes account of the economic impact of telecommunications infrastructure on aggregate income and of the role of country institutions in promoting economic growth. More specifically, we try to separate the impact of regulation from the potential indirect effects due to country institutions. We address these questions by estimating a system of equations for a panel of 30 low and middle-income countries over the 1990 -2004 period. In summary, the evidence we present confirms the positive effect of regulatory institutions on telecommunications penetration and also highlights the contribution of a more widespread mobile telecommunications infrastructure to higher levels of GDP per capita.
2000
Worldwide privatization of the telecommunications industry and the introduction of competition in the sector, altogether with the ever-increasing rate of technological advance in telecommunications, raise new and critical challenges for regulation. For matters of pricing, universal service obligations, and the like, one of the key questions to be answered is: "What is the efficient cost of providing the service to a certain area or type of customer?" As developing countries move forward with their efforts to build up their capacity to regulate their privatized infrastructure monopolies, cost models are likely to prove increasingly important in answering this question. Costs models deliver a number of benefits to a regulator willing to apply them, but they also ask for something in advance: information. Without this vital element no answer can be given to the question posed above. In this paper, we will introduce cost models and establish their applicability when different degrees of information are available to the regulator. The latter is accomplished by running the model with different sets of actual data from Argentina's second largest city and comparing the results. Reliable and detailed information is generally a scarce good in developing countries, and we establish here the minimum information requirements that a regulator needs to implement a cost proxy model approach, showing that this 'data constraint' need not be that binding.
Review of Network Economics, 2000
Infrastructure industries including telecommunications, electricity, water, and gas underwent massive structural changes during the 1990s. During that decade, hundreds of privatization transactions valued at billions of dollars were completed in these sectors in developing and transitional economies. While privatization has received the most attention, reforms also included market liberalization, structural changes like unbundling, and the introduction of new laws and regulations. To date, regulations have received far less attention than their potential economic effects warrant, largely due to lack of data. In order to address this problem, we set out to compile an extensive, comprehensive, and consistent dataset through an extensive survey of telecommunications and electricity regulators in developing countries. Our database of telecommunications regulations includes 178 variables on regulatory governance and content in 45 countries. Our database of electricity regulations includes 374 variables in 20 countries.
Regulatory reform and performance in telecommunications: unrealized potential in the MENA countries
Telecommunications Policy, 2004
Based on international evidence, this study confirms that telecommunications liberalization is conducive to higher efficiency, contributing to Information and Communications Technologies (ICT) growth. Assessment of liberalization benefits on sector performance is based on an indicator encompassing three key factors: (i) competition in fixed and mobile networks; (ii) openness to foreign ownership; and (iii) procompetitive regulation. Notwithstanding recent progress, Middle East and North Africa (MENA) telecommunications markets remain less open to competition than elsewhere in the developing world: competition is hindered, private participation is scarce and foreign ownership is most severely constrained, while regulatory regimes do not support fair competition. r
Institutions and Telecommunications Performance in Africa: Stability, Governance, and Incentives
Africa's telecommunications industry has been undergoing major reforms since the 1980s, especially in the past few years. In accordance with recommendations of the World Bank and the World Trade Organization (WTO), many countries are in the process of instituting sector reforms. These include the privatization of basic telecommunications service, the creation of separate (and ideally) autonomous regulatory institutions, as well as the introduction of competition in selected services. Sector performance is the result of a combination of factors: regulatory governance and incentives, competition, ownership, and political stability. Some African nations are beginning to put into place institutions and policies that will promote improved performance in telecommunications. This chapter examines the effect of relevant demographic, economic, political, and institutional factors on telecommunications investment (main lines per 100 inhabitants). Recent studies have focused on the influence of political and institutional factors on telecommunications performance (Henisz 1998, Henisz and Zelner 2001). This study extends earlier work by examining the situation in Africa and identifying patterns of investment activity. During the 1985-94 period, the growth rate of main lines in those countries that experienced political stability was twice the rate in unstable countries. Certainly, growth in GDP per capita was also important over this period, but the institutional endowment of a nation is a significant determinant of that as well. Because investors are aware of the potential for governments to behave opportunistically by altering the rules of the game, to take advantage of those who have made fixed investments, they require credible assurances against expropriation of property, destruction of property (resulting from civil or political strife), and bureaucratic holdups that negatively affect profitability. Managers of government-owned firms face similar issues when they make decisions regarding operations and investments. Their incentives are weak for making tough costcontainment decisions and for utilizing limited funds for long-term investments. This study uses data on twenty-four African countries to provide a critical assessment of the state of basic telecom infrastructure in Africa within an economic and institutional framework. Telecom development in Africa is among the worst in the developing world (Kerf and Smith 1996). Sector performance has been weak because of antiquated facilities, financial constraints related to government subsidies, and inefficient operations. Africa has potential as an immense and fertile market for telecom investment despite its low per capita incomes. With a reformed regulatory framework and a reduction in institutional and political risk, improvement in sector performance is feasible within the next decade.