Critical Factors in Telecom Reform Xu Yan

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Presentation transcript:

Critical Factors in Telecom Reform Xu Yan

Telecom Reform v.s. Telecom Regulation Telecom reform: to facilitate the transition from monopoly to market Telecom regulation: means to supplement the market force Both India and China is in the transitional phase of telecom reform.

Four Key Factors of Reform Independence of regulator Market liberalization Privatization Legal framework

Independence of Regulator In China, market was liberalized in 1994 but the independent regulator (Ministry of Information Industry) has not been established until The dual status of the former Ministry of Posts and Telecommunications led to a twisted asymmetric regulation in such areas as interconnection

Independence of Regulator In India: DoT had been regulator, licensor, policy maker, incumbent operator until TRAI was established in 1997 although the market was liberalized in 1994 TRAI (since 1997) + DoT TRAI was an independent regulator without much power until TRAI Act of 2000

Market Liberalization Structural approach: e.g. splitting up the incumbent in geography and service Behavioral approach: e.g. regulation on interconnection, CPP v.s. RPP

Privatization India: pro-privatization – pave the way for the regulator to deploy pro-market policy China: pro-state ownership, and the regulator always fall in the dilemma between defending users’ interests and strengthening the state assets – a deadlock for further reform

Legal Framework A legal framework may lead to low efficiency but can enhance confidence for investors

Thank You and welcome to Hong Kong Mobility Roundtable 2005! (