Surprise surprise! Market liberalisation and privatisation of the state phone company significantly boosts the quality and coverage of a country’s telecommunications structure over time, according to a statistical study by Analysys Ltd. Produced for the German Federal Ministry of Postal Services & Telecommunications, which in its ponderous teutonic way sees no possibility of privatising the Bundespost Telekom before getting on for the year 2000, analysed statistical data from 23 Organisation for Economic Co-operation & Development member countries. It found that, while Gross Domestic Product per head was the biggest factor in predicting the quality of a telecommunications network since 1975, there was nevertheless a positive link with market openness, with liberalised countries more likely to have a high-quality network. The report used a broad range of criteria to define network quality, aiming to show true network effectiveness rather than just the technology used: some of the factors measured include the number of main lines per 100 people, the level of national and international traffic per head, the number of payphones per 1,000 people, the waiting time for a main line, and the number of mobile subscribers per 1,000 population. Interestingly, Cambridge-based Analysys found that it was not just privatisation that increased the chance of a high-quality network: it also identified three other factors, any one of which was found to increase the statistical chance of a better telecommunications infrastructure. Either having a significant proportion of private ownership, an independent regulator, or public formulae for tariffs (or other types of public performance targets) were all found to increase the likelihood of an advanced system. Similarly – as well as a choice of public switched telephone network provider – competition in value-added services, mobile services, or customer premises equipment were found to have a knock-on effect in increasing the likelihood of an advanced public network. The report’s final conclusion – and presumably an important one to Germany, no doubt worried that privatisation might lead to the former East Germany falling behind in network provision – is that there was no convincing evidence that liberalisation leads to outlying areas being neglected in terms of network provision. Indeed, Analysys commented that in fact it discovered that liberalised countries tended to have a slightly higher incidence of good regional coverage, although this figure was not found to be statistically significant, and it has therefore not been included in the report.
