Telecom Regulation Environment - Report's Overview

This case study selected two different evaluation periods (1994-1998 and 1999-2004) coinciding with key regulatory events in the sector, as well as with important changes in investment flows. Between the two periods assessed there was an important change in the composition of investments due to a beneficial environment and conditions of higher certainty around interconnection and pricing. Moving beyond twisted pairs, the mobile and cable networks became more relevant towards the end of period. In this context, participation of the dominant local operator suffered an important decline. Cable and mobile phone competition were consolidated. The TRE methodology used in this case study provides a broader understanding of the impact produced by the new regulatory measures.
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The results of the study are not very flattering for the country. The general perception is that the regulatory environment has much room for improvement in every area studied and lots of work is left to do. While the survey indicates that the sector perceives that efforts have been made in lowering the barriers to market entry, there are major questions concerning the regulation of anti-competive practices and universal service obligations.
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The main issue of concern for the sector was interconnection. Given the nascent stage of the liberalisation of the mobile sector, it is not surprising that this is the central issue. The average assessments for this dimension are unsatisfactory (for both periods of observation – 1996-2000 and 2001-present). There was a lack of clear and detailed rules regarding regulation and this led to disputes between the incumbent and start-up companies. A further potentially troubling issue was that of spectrum allocation. While there is no real scarcity of spectrum in Guyana, in fact supply is larger than demand for most bands, however, problems may arise concerning spectrum allocation when the sector becomes more competitive.
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In general terms peru's telecommunication regulatory environment is seen to be on the threshold between efficient and inefficient. On the one hand, the most promising results are seen in the perception of the regulation of market entry while on the other hand improvements are required with respect to regulation of anti-competitive practices, with the regulator's actions perceived as inefficient. Overall the effect of Peru's regulatory environment on investment is perceived as neutral, with no relationship between perceived regulatory risk and investment.
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The perception of Bolivia's regulatory environment ranges from ineffecient in certain areas to neutral in others. The assessment shows that the regulatory environment has not demonstrated the necessary capacity to bring about an attractive investment environment, a result of the country's perceived high level of regulatory risk. The current political and economic situation is also important as it has a direct influence on investments in the sector.
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The study clearly shows that the perception of the regulatory environment is different for the two telecom sectors considered. While for fixed line telephony most of the regulator is perceived as "inefficient" or "not very good", for mobile telephony perceptions are broadly favourable. The difference in perception is due to the monopolistic nature of most of the fixed line sector (with competition only in international calls) y the inertia of a strong State company facing a regulator that still suffers from institutional weaknesses and the absence of clear and coherent government policies in the telecommunications area.