World Dialogue on Regulation

The focus of this  paper is on the development of the Danish telecom network and service provision market since liberalization and the role of policy and regulation in shaping this development. More specifically, the emphasis is on investment. However, in order to present a sufficiently comprehensive picture, developments in financial performance, technology diffusion, price developments, and innovation are also included. Furthermore, the competitive  situation on the Danish telecom market is examined, as the competitive environment affects the investment incentives of market players. The aim of this paper is to analyze the relationship between market developments and performance and the policy and regulatory initiatives taken and to discuss the general lessons with respect to initiatives fostering or limiting investment, innovation, and performance in general. 

(Released Feb. 2004. WDR0302a updates discussion paper WDR0302 released September 2003)  

The focus of this paper is on the development of the Danish telecom network and service provision market since liberalization and the role of policy and regulation in shaping this development. More specifically, there is emphasis on investment. However, in order to present a sufficiently comprehensive picture, developments in financial performance, technology diffusion, price developments, and innovation are also included. Furthermore, the competitive situation on the Danish telecom market is examined, as the competitive environment affects the investment incentives of market players .

The Danish telecom network and service provision market witnessed a slowly creeping liberalization from the late 1980s and onwards, first with respect to the connection of terminal equipment to the networks, later with the introduction of a second mobile operator and, further on, with a liberalization of value added services, as the major steps . The full telecom market liberalization came into effect in mid 1996 – one and a half year before the EU deadline in January 1998. The overall goal of the telecom policy and regulation has been epitomized in the slogan, ‘best and cheapest – by way of real competition’ . In 1999, more policy emphasis was put on developing ‘many pipes to the home’ , and lately there has been a development towards a policy of facilitation of IT and telecom developments with a greater emphasis on demand side factors and a broader view on the converging ICT sector encompassing traditional telecom issues as well as new issues regarding, e.g., IT security and content development. 

The aim of this paper is - on basis of these policy trends and the developments in the market - to analyze the relationship between market developments and performance and the policy and regulatory initiatives taken and to discuss the general lessons with respect to initiatives fostering or limiting investment, innovation, and performance in general.