The effect of ownership on telephone penetration

It is well known that telephone penetration (the number of telephones per 100 population) is strongly related to national income. This report examines whether telephone penetration is significantly influenced by type of ownership (ie whether the telephone system is owned and operated by a private company or a government organization) and by postal responsibility (ie whether the telephone system is run by the same organization which runs the postal system). Economic theory and evidence from other industries suggest that private ownership increases output, and one might guess that postal responsibility would tend to restrict telephone penetration - but are these hypotheses correct and are the effects significant? The author concludes that telephone penetration is significantly more responsive to per capita GDP and to population density in private systems than in government-owned systems. Joint responsibility for postal systems has no significant effect on telephone penetration.