Competition in the European Telecommunications Industry: 20 Years on from the Liberalisation.

Abstract

What conclusions can be drawn regarding competition in the European telecommunications industry, twenty years after its liberalisation? This thesis measures and compares the levels of competition in this sector across the EU between 2010 and 2017 by calculating the profit elasticity indicator based on firm-level data from thousands of companies. We find that the intensity of competition in this industry is low comparted to the majority of the other European industries, that it declined in the majority of the EU countries during the studied period, and that it is extremely heterogeneous across countries, as the profit elasticity indicator ranged between -0.32 (very relaxed competition) in Germany and 2.51 (intense competition) in Ireland. Subsequently, we assess the impact on competition of two variables: (i) the number of mobile network operators active in a country and (ii) a binary variable taking on the value 1 if the European Commission prohibited any anticompetitive behaviour in a specific country’s telecommunications industry in previous years. Regardless of the econometric method employed, we find no evidence that either of these two variables has a statistically significant impact on the intensity of competition.