Discussion Papers

Dieter Elixmann, Gabriele Kulenkampff, Ulrike Schimmel, Rolf Schwab

Internationaler Vergleich der TK-Märkte in ausgewählten Ländern - ein Liberalisierungs-, Wettbewerbs- und Wachstumsindex
Nr. 216 / Februar 2001

Summary

The present study develops a methodology which allows an objective and quantitative comparison between countries, reflecting their relative standings in three different aspects of their telecommunication industries, a liberalization index, a competition index, and a market growth index. The liberalization index reflects to what degree the regulatory framework in each country is able to open up and to foster competition. The competition index provides a measure of the current competition situation in each of the countries. The market growth index determines the current growth dynamics.

The study aims at firstly highlighting the methodology of calculating the three indices. The indices exclusively focus on the fixed link segment. Secondly, an empirical comparison of the following nine countries is carried out on the basis of the indices: Austria, Denmark, Germany, France, Italy, Sweden, Switzerland, United Kingdom, and the USA. For each country the indices are calculated as of 31.12.1998 and 31.12.1999, respectively. This implies thirdly, that an assessment of the developments in one or more countries over time is possible.

Since the fixed link market was opened up completely at the beginning of 1998, substantial progress in the appropriateness of the regulatory environment to enable competition can be observed in most of the countries. Yet, there are still remarkable differences across European countries. With regard to the degree of liberalization Denmark and the United Kingdom have top positions at the end of 1999. Germany has made considerable progress in establishing regulatory conditions promoting competition, however, it is still lagging behind the top countries. Generally it can be stated that in Europe the liberalization of the core network has made much more progress than the liberalization of the subscriber access network.

The analysis of the actual competition situation in the fixed link market segment shows that the intensity of competition has increased considerably in almost all European countries. Sweden holds the top position at the end of 1999 followed by Denmark. Germany ranks only in a medium position. The intensity of competition is in principle much stronger in the long distance segment of a country than in the local segment. The market concentration in the long distance segment usually decreases in Europe. In contrast, the market concentration in the local segment is still relatively high. In almost all countries price competition in the long distance segment is already very intensive.

There are substantial differences of the growth dynamics across the countries. In particular, a positive growth rate of minutes frequently goes along with a decline of the growth rate in the market volume of the telephony segment. At the end of 1999, Germany belongs to the countries with the highest growth. Yet, Denmark ranks at the top

Only German language version available.

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