Entry, competition, and regulation in UK telecommunications

In a formerly monopolized industry now subject to competition,there is likely to be considerable interaction between businessstrategy and regulation. The paper illustrates the developmentof this process in UK telecommunications. It sets out a frameworkin which competition between incumbent and entrants takes theform of a race on the part of the former to bridge the innovationgap and on the part of the latter to accumulate the necessarystrategic assets, including regulatory assets. The strategiesof major UK fixed-link telecommunications firms are analysedin this light, and regulatory policy towards vertical separationin mobile telephony is also described. The article draws attentionto the crucial role which the regulator plays in assisting entrantsto gain access to strategic assets, including information.