Sector-specific regulation of the electronic communications sector is one of the policy tools aimed at
promotion of competition and correction of market failures resulting from the high levels of market power
possessed by former telecoms monopolists. While, in principle, academics and policy makers concur on the
value added of regulation for increasing social welfare and efficient allocation of resources, their analysis of
past regulatory experience shows that under a number of circumstances regulation can be flawed and lead to
welfare harm rather than benefit. Inappropriately designed sector-specific remedies and regulatory delays in
the introduction of new telecommunications services can hold up the development of the market towards
effective competition and instead might incur considerable welfare losses.1 This article has been shortlisted
for the 2nd World Competition Young Writer’s Award.
World Competition