Telecom Industry: Competition, Interconnection Requirements, And the Need for Regulations (Information Technology) (Report‪)‬

The telecom industry is a decreasing cost industry. Moreover, it plays a crucial role in national security and cultural development because most of the 'command and control' messages and interpersonal dialogues are passed on through telemedia. For these reasons, this industry had been, or is still being run as a state-monopoly almost in every country of the world. However, due to absence of competitive forces in national markets, productive inefficiencies were quite vivid in many cases. Consequently, some developed countries opened up their telecom markets for competition. Expectedly, the experience was reasonably successful. As a result, almost all the remaining countries including Pakistan are following the suite. It is, however, interesting to note that competition in this industry has different connotation. A new entrant in this industry first has to have interconnection links with one or more of its rivals, only then it can compete meaningfully. But an incumbent operator that usually possesses enough market power hardly grants interconnection privileges to the new entrant. Hence, the need for a regulatory body can hardly be undermined. The main function of this body should be to facilitate fair interconnection deals that ensure a reasonable rate of return to all efficient operators, minimum possible prices of telecom services to end users and, most importantly, a respectable growth rate for this industry. To make sure that the regulatory body keep performing in the best 'public interest', it is desirable that either an advisory body is set up to review the decisions of the regulatory body, or open forums/hearings are arranged to solicit public opinion on critical issues. INTRODUCTION