Price formation and development in the postal and telecommunications sector

The study examines the transformation of the Post and Telecommunications Office (PTL) into a public enterprise in 1990 and its effects on pricing and options for developing the sector.

With the public enterprise reform, PTL gradually gained full freedom in pricing. The study empirically examines how this freedom has affected prices. The results reveal a clear difference between Post and Tele: Post prices rose, suggesting the exercise of monopoly power, while Tele prices fell under the influence of competition.

With regard to development options, the study recommends for Post an arrangement along the lines of the EC countries model, in which a regulated monopoly is retained for core services but free competition is permitted in specialist services. Tele, by contrast, should be incorporated as a limited liability company, as there are no longer any alternatives to a competitive strategy given the network investments made and licences granted. To manage the instability of the duopoly situation that has arisen, a liberal licensing policy is proposed, along with public intervention if necessary to safeguard the price level. (AI translation)

• ISSN: 0358-5980
• ISBN: 951-9282-67-X