An econometric analysis of telecom competition, privatization, and regulation in Africa and Latin America

This paper explores the effects of privatization, competition. and regulation on telecommunications performance in 30 African and Latin American countries from 1984 through 1997. Fixed-effects regressions reveal that competition-measured by mobile operators not owned by the incumbent-is correlated with increases in the per capita number of mainlines, payphones, and connection capacity, and with decreases in the price of local calls. Privatization combined with an independent regulator is positively correlated with telecom performance measures. Privatization alone, however, is associated with few benefits, and is negatively correlated with connection capacity.