The effect of regulation in telecommunication sector on competition: An emprical application of OECD countries

Regulation economy has been improving as a sub-discipline of economy. Various economic regulation theories have been improved since the public interest theory of regulation. Although all these theories are coherent within itself, changing economic conditions and way of states? intervention to economy make it difficult for a general theory to be acceptable in this field. Regulations which are accepted as a means of competition policy today are being conducted by independent organizing institutions, aim to improve competition in markets and remove practices which prevent competition. The telecommunication sector which has the characteristics of natural monopoly has transformed into a competitive structure, public operators have been privatized and independent regulatory institutions have been formed in the sector. In this study, in parallel to the methods in literature, the effect of organizing reforms in telecommunication sector on competitive performance of telecommunication sector in OECD countries were analyzed with panel data method. In the study which is carried out for OECD countries, it was concluded that regulation studies in telecommunication sector has brought decrease on prices and level of income per capita; and has brought increase on employment, investment, income, internet usage, number of subscribers and labor efficiency. Moreover, privatization studies which are thought to have competitive contribution to sector brought decrease on prices, employment and income per capita; increase on investment, number of subscribers, internet usage, income and labor efficiency. According to application results of the study, it was concluded that forming organizing activities in telecommunication sector have positive effects on the improvement of competitive structure of sector and growth dynamics of the sector, and that panel data results are coherent with theoretical expectations in general sense and support hypotheses of the study.Keywords: Regulation, Competition, Telecommunication, Panel Data, Independent Regulatory Institutions, Privatization.