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Where are we in Reform of Telecommunications Markets?
Nov 30, 2002

The answer has been provided in a recent study by Carsten Fink, Aaditya Mattoo, and Randeep Rathindran of the World Bank. The authors find that Regulatory reforms that led to private and competitive supply of telecommunications resulted in an average 8 percent higher level of mainlines and a 21 percent higher level of productivity compared to cases were reforms were not undertaken or limited to privatizations.

The sequence of reform of telecommunications supply matters according to the authors. They find that mainline penetration is lower if competition is introduced after privatization, rather than at the same time. Fink. Mattoo and Rathindran also find that autonomous factors, such as technological progress, had a strong influence on telecommunications performance, accounting for an increase of 5 percent per annum in teledensity and 9 percent in productivity over the period 1985 to 1999.

The study “An Assessment of Telecommunications Reform in Developing Countries” by Carsten Fink, Aaditya Mattoo, and Randeep Rathindran of the World Bank is available here in PDF format or from the World Bank website.

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