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Was PLDT a natural monopoly?: An economic analysis of pre-reform Philippine telecoms

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  • Serafica, Ramonette B.

Abstract

Prior to the liberalization of the telecommunications sector in 1993, telephone service in the Philippines was provided by a private monopoly. This article examines whether or not the Philippine Long Distance Telephone Company's (PLDT) virtual monopoly of the market was justifiable based on cost conditions. Our empirical test reveals that natural monopoly properties did not exist in PLDT's provision of toll and local telephone services. At least two firms could have provided the same level of services without increasing total cost. Our results therefore provide evidence in support of the demonopolization of the industry.

Suggested Citation

  • Serafica, Ramonette B., 1998. "Was PLDT a natural monopoly?: An economic analysis of pre-reform Philippine telecoms," Telecommunications Policy, Elsevier, vol. 22(4-5), pages 359-370, May.
    • Handle: RePEc:eee:telpol:v:22:y:1998:i:4-5:p:359-370
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    Cited by:

    1. Harry Bloch & Gary Madden & Scott Savage, 2001. "Economies of Scale and Scope in Australian Telecommunications," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(2), pages 219-227, March.
    2. Patalinghug, Epictetus & Llanto, Gilberto M., 2005. "Competition Policy and Regulation in Power and Telecommunications," Discussion Papers DP 2005-18, Philippine Institute for Development Studies.
    3. Mattsson, Pontus, 2019. "The impact of labour subsidies on total factor productivity and profit per employee," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 325-341.

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