Telecom Prices, Regulatory Reforms, Consumers’ Satisfaction: Evidence for 15 EU Countries

Abstract:     
We study the impact on consumers of privatization and liberalization in
the telecommunication sector for 15 EU Countries. Policy reforms are
summarized by the OECD regulatory indicators (REGREF), that consider the
extent of privatization, vertical disintegration, and market entry. After controlling
for other country variables, we first test the impact of ownership and regulatory
changes on productivity and consumer prices. In a second step, we consider the
Eurobarometer data on consumers’ satisfaction about quality and prices of the
telecommunication service. The analysis confirms the importance of market
regulation in reducing prices and increasing productivity performances, but
minimize the role played by privatization per se. The latter and liberalization of
the telecommunication market play a role in explaining the consumers’
satisfaction about prices and quality of the service, but country features are more
important. Overall, our findings offer only mixed evidence, and somehow
contradict, the hypothesis of welfare dominance across the EU of a unique reform
paradigm in the telecom industry.

Number of Pages in PDF File: 26

Keywords: telecom industry liberalization, privatization, impact on European consumers

JEL Classification: L32,L33,L96

Accepted Paper Series