Frontier study emphasises role of dynamic competition in the telecoms sector

The Latin America Centre for Telecommunications Studies today published a Frontier study on competition in dynamic markets.  The study looks at the challenges facing regulatory market analysis in the telecoms sector, highlighting the importance of dynamic competition as a source of consumer benefits in the long term.

A key factor that differentiates telecoms from other sectors is the rapid pace of technological innovation. These advances have enabled the introduction of many new features in fixed and mobile devices, greater variety of services, improvements in quality, faster download speeds, and reductions in cost. Such rapid innovation would not have been possible without a dynamic competitive environment incentivising investment. In this context, the study points to the excessive weight that regulation can place on consumer welfare in the short term, compared to the intense dynamism of the sector.

To better account for the dynamic nature of competition, the study suggest that any market analysis should:

  • assess the presence and strength of entry barriers;
  • evaluate the degree and nature of the rivalry among market participants;
  • reinterpret the role of market shares and their evolution; and
  • analyse indicators of market performance and customer satisfaction.

José María Rodríguez, Associate Director at Frontier, considers that “this study will inform the debate on how to best take into account the dynamic nature of the telecoms sector in any regulatory or competition analysis.”

Frontier has advised widely on market reviews in Europe, Latin America, Africa and the Middle East.

For more information, please contact Julia Caldano on j.caldano@frontier-economics.com, or call +34 91 343 2350.

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Related Sectors:
Telecoms
Related Disciplines:
Competition
Regulation