Telecommunications Market Evolution in Finland and New Zealand: Unbundling the Differences
Bronwyn E. Howell
Victoria University of Wellington - NZ Institute for the Study of Competition and Regulation Inc. and Victoria Management School
August 14, 2008
Finland and New Zealand are two countries with many geographic, social, demographic and historic similarities. Their telecommunications markets also demonstrate many superficial similarities. However, beneath the superficial performance parallels lie two markets that have developed under fundamentally different cultural, institutional, commercial and political assumptions. By tracing the development of each market, this paper explores the effect that these differences have had upon shaping the markets and explaining both the observed similarities in market performance and the differences.
The comparative analysis suggests that Finland's industry characterised by decentralised and privately-owned local firms has adjusted to the more liberalised, commercially-focused and competitive markets in the 21st century in a more measured and evolutionary manner than has been observed in New Zealand, where centralised government ownership and control prevailed until the revolutionary joint privatisation and liberalisation occurred. The different cultures, norms, values and attitudes observed in the two countries have both evolved as a consequence of the different market development paths taken, and in part explain many of the commercial differences. Nonetheless, the most significant differences in observed market performance appear to arise from regulatory artefacts - in New Zealand's case to the distorting influence of universal service and free local calling obligations, and in Finland's case to the prevention of mobile handset bundling with subscriptions.
Number of Pages in PDF File: 44
Keywords: Telecommunications, Finland, New Zealand, Market Structure
JEL Classification: D02, L10, L52, L96working papers series
Date posted: August 17, 2008
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