Trends in Economics and Finance

Use of Economic Modelling in Telecommunications (Volume II)

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In the telecommunication industry, economic modelling techniques such as regression analysis, simulations and linear programming are powerful tools that can aid decision making for governments, regulatory authorities and telecommunication operators. Nevertheless, in many countries such techniques are often under-employed. The aim of this report is to describe the various economic modelling techniques and how they can be used to solve practical problems facing the elecommunication industry: for example how a proposed merger may affect competitive behaviour or how demand and profitability may be affected by a price change.




Changing technologies to deliver electronic communication services are having a profound effect on the structure of telecommunication markets. An industry which was once characterized by monopoly supply is now competitive in many parts of the value chain. This new market structure still requires regulation to ensure that markets continue to open up to competition and that dominant operators function efficiently. At the same time, operators need more knowledge of their markets and their costs to be able to compete effectively with new competitors.


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