Liberalizing development : effects of telecommunication liberalization in Thailand and the Philippines

Abstract

This thesis hypothesized that extensive telecommunications liberalization would not increase the penetration rate of the fixed telephone service better than other, less competition-oriented, policy alternatives. The hypothesis was validated in the case of Thailand and the Philippines. However, for the cellular mobile telephone and Internet services, extensive telecommunications liberalization could increase the penetration rates better than other, less competition-oriented, policy alternatives. Thus, the thesis demonstrates that past research has not paid sufficient attention to this issue and has assumed that the more extensive reform could lead to the faster and the better telecommunications development of all telecommunication services. The thesis suggested that less-developed countries (LDCs) should realize that they do not have to fully implement liberalization reforms, but should instead specifically tailor their telecommunications reform policies to their own pace and needs. This study found that extensive liberalization reforms or extensive opening of the market does not necessarily increase penetration rates of services better than other less competition-oriented policy alternatives under the following conditions: Assuming that the services have not yet reached their saturation levels based on the S-curve,

(cont.) 1. Users perceive the service as a necessity; and 2. the government perceives the service as a basic necessity; and 3. the government strictly commits and implements purposeful policies with the intention of increasing penetration rates of the services through the distribution of service provision authority. Or, 4. If the liberalization is implemented after the saturation level of the service is reached. The thesis results have the policy implication that liberalization can be a useful and effective alternative to lead to higher penetration rates, when and only if, the country and its people understand its goals, effects and implications and, more importantly, when the government provides the policy framework for universal service for the benefits of its people so that the liberalization can lead to self-sustainable development.