Does smallness affect the liberalisation of telecommunications? The case of Cyprus

A review of the literature on small economies and on telecommunications policy suggests that policy makers disregard the possible effects of the size of the economy on liberalisation outcomes. This paper builds on the literature on small economies to classify economy size according to economic, demographic, and geographical measures in order to empirically examine whether small size affects the effective culmination of liberalisation of telecommunications. A cluster of small economies that have a maximum population of 9.2 million (Guinea), GDP of US $86.17 billion (Singapore), and arable area of 19.3 thousand km² (Central African Republic) are the main focus of analysis. In particular, the paper capitalises on an in-depth analysis of the liberalisation of telecommunications in Cyprus and an econometric analysis of the respective European experience. The country-specific outcomes of liberalisation in Cyprus are consistent with the general tendency in small European economies and jointly provide strong evidence that smallness affects the success of liberalisation. The paper concludes with an array of policy suggestions for small economies.     

A pan-European telecommunications regulator?

Creating a single telecommunications market in the European Union is well under way, particularly with the approach of full competition after 1 January 1998. However, the regulatory framework needs to reflect the demands of the single market and the needs of industry. The European Commission has been reviewing whether a single pan-European telecommunications regulator would offer a valuable focus in streamlining the existing regulatory structure. In so doing, they commissioned Denton Hall and NERA to evaluate the needs of industry and the legal and practical approaches to the creation of a single regulator.     

Concentration of the mobile telecommunications markets and countries’ competitiveness

This study examines how the level of concentration of a country’s mobile telecommunications market affects its competitiveness. We created a unique database with information on 59 countries, which we used to perform several estimations including an instrumental variable approach to explain the degree of concentration in mobile phone markets. Our first and direct estimation shows that the higher the concentration in this industry, the lower the countries’ competitiveness. In order to understand this positive correlation, we provide two additional estimations. First, using an instrumental variable, we find that the concentration in mobile telecommunications market explains the use of information and communications technology (ICT). Moreover, we also find that the use of ICT is positively correlated with countries’ competitiveness. Thus, our results confirm that the mobile phone industry has positive spillover effects on countries’ competitiveness and demonstrate the benefits of policies designed to reduce concentration and market power in the industry.     

Does corporate social responsibility influence the corporate performance of the U.S. telecommunications industry?

This study uses a two-stage approach to explore the relationship between the operational performance of U.S. telecommunications companies and their implementation of corporate social responsibility (CSR). In the first stage, this study adopts the dynamic data envelopment analysis model to measure the efficiency of the telecommunications industry in the U.S. from 2004 to 2008. The empirical results show that the corporate efficiency of those companies that implemented CSR was higher than that of those companies that did not. In the second stage, the study adopts OLS and 2SLS to explore the influence of the execution level of CSR on performance. The results show that the Kinder, Lyndenberg, and Domini & Co (KLD) social ratings indexes are significantly and positively related to corporate performance. Finally, this study suggests ways in which corporate policy makers can enhance CSR in order to improve corporate performance in the U.S. telecommunications industry.     

‘Common food policy’ for Europe

This article is an edited version of a speech given by Hector Laing, 7 December 1977, at a Conference on ‘The Consumer's Voice in Europe’, organized by the European League for Economic Cooperation in London.     

Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on?

Indonesia is currently enjoying rapid development in the telecommunications sector despite the economy having been heavily dependent for almost four decades on the two largest sectors: the manufacturing industry and trade. The telecommunications sector has played an important role in stimulating economic growth in the country during the last few years, with an annual growth rate higher than that of other sectors. This contribution is supported to a great extent by the rapid diffusion of telephony, in particular cellular telephony, as the number of subscribers increased from just 2.1 million in 1999 to 170 million in 2011. Previous studies investigating the impact of the telecommunications sector on the economy aggregate the impact of the sectors on Gross Domestic Product (GDP) without further scrutiny of what sources of growth telecommunications has contributed. Hence, an interesting question arises as to whether the achievement of cellular diffusion is also followed by structural change in the telecommunications sector. That said, this study aims to decompose the output of telecommunications into several sources of growth: domestic final demand, export effect, import substitution effect and technological coefficient effect. A particular interest in this study is to compare the source of growth concerning domestic final demand and the technological coefficient effect. The main tool for analysis in this study is the Input–Output (IO) method, while the time series of the investigation covers the period 1975–2008, allowing comparison of structural changes in the telecommunications sector between the pre- and post-cellular eras. The study found that the coefficient multiplier of the telecommunications sector, which was approximately 1.8 during the 1980s, had decreased to only 1.3 by the end of 2008. Consequently, the final demand from the telecommunications sector contributed less to economic output in the late 2000s compared to the impact in the 1980. Moreover, the cellular era that started in the early 2000s also brought about a trend of changes in telecommunications output. While final demand remains very dominant, the technological coefficient effect has diminished as the source of telecommunications output. This finding indicates a lower ability of the telecommunications sector to build an inter-industry relationship with other sectors. A possible explanation for this result is the cellular uses which are much less related to business activities than that of fixed telephony dating back to the 1970s in Indonesia.     

Convergence and unbundling of corporate R&D in telecommunications: is software taking the helm?

This paper presents a view of the changing structure of corporate R&D in telecommunications – one that is close to Adam Smith’s insightful and enduring idea of division of labor – that perhaps we are witnessing the beginnings of vertical disintegration and unbundling of important segments of the industry’s R&D activity. The paper maintains that the emergence of an independent software industry – aided by the convergence of computer, telecommunications and imaging technologies – and the rapid growth of technology-based alliances are at the heart of this trend. So extensive is the vertical disintegration of R&D that, in 1997, the top 10 independent software vendors in the US spent more on R&D than the combined spending by AT&T and Lucent whose sales were well over three times as large. It appears that the source of future innovation in the telecommunications industry lies not in its services segment but rather in telecommunications and Internet equipment firms and independent software firms. Increasingly, the fortunes of large service providers like AT&T will depend less on innovation and more on their ability to configure and market complete one-stop-shopping solutions to customers by combining internal resources with outsourced technologies, products and services.     

China’s telecommunications evolution,institutions, and policy issues on the eve of 5G: A two-decade retrospect and prospect

Over the past two decades, China’s telecommunications industry has witnessed drastic market reform, steadfast institutionalization, and volatile technological changes, which have driven exponential industry expansion. This paper offers an updated longitudinal and comprehensive review on this reform process on the eve of 5G (the fifth generation mobile communications networks). First, the paper segments the two-decade reform crusade into discernible phases, each of which is embedded with different policy drives. These reform phases are then pattern-matched against the subtleties of the overall institutional, technological, and market backdrop. A series of policy issues are identified through a systematic examination of industry phenomena over the reform course. Finally, the status of research is assessed regarding China’s telecom industry and reform, based on which, knowledge gaps are identified and future research agenda suggested. Conclusions are made regarding future reform and research imperatives. The paper advances the understanding of China’s telecom reform, development, and the underlying policy issues. It updates and expands previous works on similar topics. Overall, this study provides important theoretical, managerial, and policy implications.     

Is telecommunications regulation efficient? An international perspective

This article addresses the efficiency of regulation policy in the telecommunications sector. First, the concepts of static and dynamic efficiency are reviewed, with the main policies used into achieve these goals identified, while distinguishing effective competition from industrial policy. Indicators are proposed that enable assessment of components of sector efficiency. These indicators are used to empirically investigate the link between regulation policy and economic performance for OECD Member Countries. The investigation is based on national differences in regulation policy and efficiency indicators. The results support the notion that asymmetrical ex ante regulation alone is not necessarily efficient, and that an ex ante policy, integrating an industrial policy, could favor dynamic efficiency.     

Is business lobbying in the European Union context-dependent? Evidence from the policy field of radio spectrum

This paper investigates contextual factors which impact on how business lobbying is carried out in radio spectrum policy in the European Union (EU). Based on the empirical evidence collected by means of ten expert interviews, the following considerations are drawn: first, the European Commission (hereafter “the Commission”) weighs highly information provided by corporate stakeholders which is in line with the EU objective to promote EU-wide coordinated use of radio spectrum. Second, the way the Council of the EU (hereafter “the Council”) is lobbied at EU level is unclear because of lack of transparency in the Council. Third, radio spectrum policy issues require niche expertise to be addressed because of high degree of complexity. Fourth, radio spectrum policy issues are characterised by low degree of salience as they are too technical for the wider public. Although centred on the EU context, the issues raised in this study, such as lack of transparency and civil society underrepresentation, are not unique to the EU system. In this respect, comparative studies between the EU and other institutional contexts may contribute to a better understanding of variation in business lobbying.     

How can policy processes remove barriers to sustainable food systems in Europe? Contributing to a policy framework for agri-food transitions

A new food policy coherent with the goal of achieving sustainable food systems implies changing visions and radically revising the understanding of the system on which agricultural and food-related policies act. This paper identifies and discusses policy processes that contribute to sustainable food systems in Europe. Based on a conceptual framework that links the policy cycle approach to transition theories, we (i) assess the evolution of policy cycles of the Common Agricultural Policy (CAP) to highlight how the food and nutrition concepts have evolved and been reframed throughout the five phases of the CAP, (ii) map and classify available policy instruments to assess potential synergies and gaps in view of their reorganization and (iii) indicate and discuss strategic tools for sustainable food policies. This contribution goes beyond the current literature highlighting the obstacles which hinder the transition to a policy regime that embodies the nexus among food and nutrition security, natural capital preservation and climatic and social justice, and proposing new avenues for food policy studies.     

Competition law and regulation in the Turkish telecommunications industry: Friends or foes?

The interaction between national competition authorities (NCAs) and national regulatory authorities (NRAs) plays a vital role in institutionalizing competition policy during regulatory reforms. Questions about jurisdictional authority over competition policy are far from settled     

Liberalisation policy,industry structure and productivity changes in Korea’s telecommunications industry

The paper examines the efficiency implications of the liberalisation policy in Korea’s telecommunications industry. The paper develops a contextual understanding of the Korean evolutionary path and discusses various transitional difficulties and additional complications posed by business conglomerates that Korea confronted. Examining factors affecting efficiency, the paper shows how the government commitment to the liberalisation schedule imposed a credible competitive threat to the incumbent carriers and enhanced dynamic efficiency of the industry.     

An assessment of Thailand’s new telecommunications plan

Thailand’s master plan for telecommunications policy for 1997–2006 envisages cautious steps towards liberalization. Among the new policies, the establishment of an independent regulatory agency is proposed. Desirable characteristics of the agency are discussed. Two salient features of the master plan, a proposal to split the country into six zones for licensing private firms and a commitment to a type of universal access to the system, are also discussed. Introduction of non-linear pricing, which is more economically efficient, may be possible in Thailand. Furthermore, it may help the achievement of the goals inherent in universal access and zoning, as well as another goal of the master plan, of making the system more competitive.     

How will telecommunications bundles impact competition and regulatory analysis?

In this article, one makes two points about the impact of bundles on competition and regulatory policy. First, one argues that the growing importance of bundles requires an adjustment in the current framework of relevant product markets for individual services, and that the traditional tools of competition policy, namely the SSNIP test, can be adjusted to deal with these new circumstances. Second, one argues that the technological and behavioral changes, underlying the emergence of bundles, call for a shift of emphasis in regulatory policy from ensuring access to the incumbent’s fixed telecommunications network services to ensuring access to television content.