The Impact of the Regulatory Process and Price Cap Regulation in Latin American Telecommunications Markets

Abstract

I empirically examine the impact of the liberalization and regulatory process on the Latin American telecommunications sector during the period 1990-1998. I find that privatisation and the existence of an independent regulator are positively associated with teledensity and operating efficiency while competition and price cap regulation are strongly positively associated with teledensity. This study confirms results in previous research that identify the importance of an independent regulator, competition and privatisation. Moreover, this study provides an initial examination of the positive impact that price cap regulation has had on telecommunications market in Latin America.