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Regulation and efficiency in transition: The case of telecommunications in Italy

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  • Mancuso, Paolo

Abstract

In regulating the telecommunications industry, the separation between network and retail functions, which is designed to countervail the market power of incumbent operators, is a relevant issue. Despite its importance, little empirical research has addressed the effects of such a separation. Accordingly, this paper provides insights into the consequences of the Italian communications regulatory authority's (AgCom) decision to impose this type of separation on the incumbent telecommunications operator, Telecom Italia. In particular, the studied separation is between the firm's network-related functions, and those used for provision of its communication services. The present research finds that the type of separation implemented by AgCom allows a provider to maintain the advantages of operational scale in its network structure without dampening competition in the existing market for communications services. The study also offers further empirical evidence on the advantages of a composite vs. translog function in analyzing the multiproduct cost structure of a telecommunications operator.

Suggested Citation

  • Mancuso, Paolo, 2012. "Regulation and efficiency in transition: The case of telecommunications in Italy," International Journal of Production Economics, Elsevier, vol. 135(2), pages 762-770.
    • Handle: RePEc:eee:proeco:v:135:y:2012:i:2:p:762-770
    DOI: 10.1016/j.ijpe.2011.10.009
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    Cited by:

    1. Howell, Bronwyn, 2014. "Separation anxieties: Structural separation and technological diffusion in nascent fibre networks," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106840, International Telecommunications Society (ITS).
    2. Cadman, Richard, 2019. "Legal separation of BT: A necessary incentive for investment?," Telecommunications Policy, Elsevier, vol. 43(1), pages 38-49.
    3. Fabian Queder, 2020. "Towards a vertically separated broadband infrastructure: The potential role of voluntary separation," Competition and Regulation in Network Industries, , vol. 21(2), pages 143-165, June.
    4. repec:vuw:vuwscr:19314 is not listed on IDEAS
    5. Howell, Bronwyn, 2014. "Structural Separation and Technological Diffusion," Working Paper Series 19314, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    6. Juite Wang & Jung-Yu Lai & Li-Chun Hsiao, 2015. "Value network analysis for complex service systems: a case study on Taiwan’s mobile application services," Service Business, Springer;Pan-Pacific Business Association, vol. 9(3), pages 381-407, September.
    7. Howell, Bronwyn, 2014. "Structural Separation and Technological Diffusion," Working Paper Series 4353, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    8. Barnabé Walheer, 2019. "Dynamic directional nonparametric profit efficiency analysis for a single decision-making unit: an aggregation approach," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 41(4), pages 1123-1149, December.

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