Multidimensional Performance in Telecommunications, Regulation and Competition: Analysing the European Major Players

Giovanni Fraquelli
(University of Turin and Ceris-Cnr)

Davide Vannoni
(University of Turin and Ceris-Cnr)

December 1998

Abstract

In this paper we adopt the methodology developed by Banker et al. (1993) in order to investigate the dynamics of the different components of performance for the major European telecommunications operators during the period 1989-1993. The results show a general improvement in productivity levels and a reduction in the ratio between output and input prices. The best productivity performances were attained by the British and (to a lesser degree) the French utilities, while only British Telecommunications was remarkably reducing output prices. These findings are consistent with the view that incentive regulation is useful to enhance efficiency but the introduction and the promotion of competition seems to be more effective in reducing the price levels.

 Key words: Telecommunications, Performance, Regulation
JEL classification: L96, M40