Price Regulation in Telecommunications Sector and Its Implications

Telecommunication facility has been provided in most countries as a user pay public service managed, typically, through the Post, Telegraph and Telephone departments or by some government-owned monopoly. The tradition has been to regard it as a natural monopoly to be supplied by the public sector.1 This perception has changed. Telecommunication is now increasingly recognised as a prime mover of the modern day economy. It is opening to participation by the private sector. The economic benefits of telecommunications are enormous, both as a growth industry in its own right and in terms of its impact on economic development. It has a significant social role in transforming how people communicate, become informed or do business. Additionally, it is also environment-friendly because it disseminates information without shifting goods or people. The practice now in vogue is to establish a regulatory agency with a high degree of independence from both operator and government. The regulator’s task is to implement government policy, ensure performance accountability by the operators and other players in respect of economic and social policy objectives, resolve disputes between competitors, monitor changing industry conditions and advise government on developments bearing on policy. The regulatory agency acts as a buffer between telecom operators and government, helping to ensure the separation of functions. Of late governments have increasingly been pursuing the policy of privatisation, liberalisation and de-regulation of telecommunication services. Pakistan has also made an advance in this direction with the promulgation of the Pakistan Telecommunications (Reorganisation) Act 1996. The main objectives are the promotion of rapid development, modernisation and diversification of telecommunication services and protection of consumer interest. In this paper an attempt has been made to answer the question as to why there is need to regulate telecommunication. Determining reasonable prices for a monopoly public service is an important area in telecom sector.

Why is it so difficult to implement a GST in Pakistan?

This paper is based on a presentation at the Sixth Annual Conference of the Lahore School of Economics, April 2010, and an International Growth Centre workshop at LUMS in June 2010

Government interference in power sector regulation: a case of Pakistan

In December 2016, five independent regulatory authorities viz. National Electric Power Regulatory Authority (NEPRA), Pakistan Telecommunications Authority (PTA), Oil and Gas Regulatory Authority (OGRA) and Public Procurement Regulatory Authority (PPRA) were transferred from the Cabinet Division to their respective line ministries in Pakistan. This step was soon followed by amendments to the 1997 Nepra Act, made to the effect of aligning Nepra’s policies with the broader socio-economic policies of the government. This paper recounts the history of Nepra’s conflict with the federal government, and presents the case for and against regulatory independence, based on a review of selected theoretical and empirical literature. It also describes the policy issue from the perspective of the Institutional Analysis and Design Framework

Liberalizing basic telecommunications : the Asian experience

The authors examine the liberalization of the basic telecommunications sector in Asian countries with a view to identifying good policy and determining how multilateral negotiations can promote it. They find that most Asian governments, despite the move away from traditional public monopolies, are still unwilling to allow unrestricted entry, eliminate limits on private and foreign ownership, and establish strong, independent regulators. But where comprehensive reform has been undertaken-including privatization, competition, and regulation-the availability of main lines, the quality of service, and the productivity of labor are significantly higher. Somewhat surprisingly, little unilateral liberalization has occurred since the last round of telecommunications negotiations under the General Agreement on Trade in Services (GATS). The new round therefore faces the challenge of not merely harvesting unilateral liberalization, as in the past, but of negotiating away existing restrictions. Since quantitative restrictions on the number of telecommunications service suppliers are pervasive, deepened GATS rules could help ensure transparent and nondiscriminatory allocation of licenses. There may also be a need to sharpen the regulatory principles established in the last round and to create rules that safeguard not only the rights of foreign suppliers but also those of consumers.Decentralization,ICT Policy and Strategies,Environmental Economics&Policies,Economic Theory&Research,International Terrorism&Counterterrorism,ICT Policy and Strategies,Economic Theory&Research,Environmental Economics&Policies,Knowledge Economy,Education for the Knowledge Economy

An Investigation of Firm Heterogeneity in the Constraints to Development and Growth in Pakistan

This study considers the importance of firm characteristics in explaining the degree of business constraints facing Pakistani firms in the Investment Climate Survey. We quantify how firms with differing characteristics experience particular problems. After controlling for other factors, the largest differences in responses to business constraints occur among firms that vary by manufacturing industry, and among firms operating under different ownership structures or selling in different markets. In some cases, firm size and firm location also play an important role. The age of the firm generally does not lead to significant differences. These results account for the heterogeneity of firms better than others, and may be important for policy-makers to develop more specific approaches to fostering the investment climate.Pakistan, Investment Climate, Business Constraints

Telecommunication Infrastructure Development and Economic Growth: A Panel Data Approach

The present study empirically investigate the dynamic relationship between telecommunication infrastructure and economic growth, using data from twenty-four low income, middle income and high income countries for a 18 years period, from 1985– 2003. With a panel data set, this study uses dynamic fixed effect and random effect models for estimation, which allows us to test the relationship between country’s economic growth with initial economic condition, fixed investment, population growth, government consumption as well as telecommunication infrastructure. The results show that telecommunication is both statistically significant and positively correlated to the real GDP per capita of these countries included in the study. The results are robust even after controlling for investment, population growth, past level of GDP per capita and lagged growth. The results further indicate that the telecommunication investment is subject to increasing returns, suggesting thereby that countries gain more and more with the increase in telecommunication investment. The second test, Granger’s causality test confirms the causal relationship between telecommunication infrastructure and economic growth, but the relationship is significant from telecommunication to GDP per capita side but insignificant on GDP per capita to telecommunication development side.Telecommunication Growth, Panel Data, Fixed and Random Effect, Granger Causality

Working for the few: political capture and economic inequality

Introduction: Almost half of the world’s wealth is now owned by just one percent of the population, and seven out of ten people live in countries where economic inequality has increased in the last 30 years. The World Economic Forum has identified economic inequality as a major risk to human progress, impacting social stability within countries and threatening security on a global scale. This massive concentration of economic resources in the hands of fewer people presents a real threat to inclusive political and economic systems, and compounds other inequalities – such as those between women and men. Left unchecked, political institutions are undermined and governments overwhelmingly serve the interests of economic elites – to the detriment of ordinary people. In this paper, Oxfam shows how extreme inequality is not inevitable, with examples of policies from around the world which have reduced inequality and developed more representative politics, benefiting all, both rich and poor. Oxfam calls on leaders at the 2014 World Economic Forum at Davos to make the commitments needed to counter the growing tide of inequality

Economic determinants of global mobile telephony growth

This study examines the substitution effect between fixed-line and mobile telephony while controlling for the consumption externality associated with telephone networks. A dynamic demand model is estimated using a global telecommunications panel dataset comprised of 56 countries from 1995–2000. Estimation results show the presence of a substantial substitution effect. Additionally income and own-price elasticities are reported. Analysis of impulse responses for price, income and network size indicate substantial mobile telephone growth is yet to be realised. However, price ceilings imposed in the fixed-line network can retard the growth of the mobile network.

Digital Opportunity Initiative for Pakistan

“People lack many things: jobs, shelter, food, health care and drinkable water. Today, being cut off from basic telecommunications services is a hardship almost as acute as these other deprivations, and may indeed reduce the chances of finding remedies to them”. By these remarks at Telecom 99 in Geneva, Switzerland, UN Secretary General Kofi Anan warned of the danger of excluding the world’s poor from the information revolution. Although the world has seen exponential progress in terms of artificial intelligence, biotechnology, genetic engineering, neural networks, neurolinguistic programming, information technology management, telematics and infonomics, trade liberalisation, space exploration—but on ground the very pace and velocity of knowledge-driven growth has left a giant crevice between the information haves and the information have-nots, giving birth to a nomenclature called—the Digital Divide. Today information has become the most vibrant force and factor of production in the new economy contrary to the four traditional factors of production. Information has become the most important source of economic activity and the link which drives the info-hungry entrepreneurs to utilise the four factors of production in the optimal manner. Not land, not labour, not capital has done for an entrepreneur which the information alone has done. The world has seen a paradigm shift from scarce economic resources to the Age of Abundance—where plenty of information is available!