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Regulation and international telecommunications pricing behaviour


  • Madden, Gary G
  • Savage, Scott J


Recent technology change and market liberalization have substantially reduced the costs of providing international message telephone services (IMTS). However, the full extent of these cost reductions have generally not been reflected in lower prices. This paper reviews the recent literature on international telecommunications markets, and examines regulation and IMTS pricing behaviour. Particular attention is given to the accounting rate system (ARS), uniform settlement policies, and asymmetric competition. Several market behaviour scenarios are described where regulation has resulted in carriers implementing inefficient pricing rules for both accounting and collection rates. Finally, economic and political strategies are put forward that could supplant the current outmoded and uneconomic ARS, and bring about the full benefits of a freely functioning marketplace to telecommunications users.

Suggested Citation

  • Madden, Gary G & Savage, Scott J, 2001. "Regulation and international telecommunications pricing behaviour," MPRA Paper 11121, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:11121

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    References listed on IDEAS

    1. Frieden, Rob, 1993. "International toll revenue division : Tackling the inequities and inefficiencies," Telecommunications Policy, Elsevier, vol. 17(3), pages 221-233, April.
    2. Oecd, 1997. "New Technologies and their Impact on the Accounting Rate System," OECD Digital Economy Papers 28, OECD Publishing.
    3. Ergas, Henry & Paterson, Paul, 1991. "International telecommunications settlement arrangements : An unsustainable inheritance?," Telecommunications Policy, Elsevier, vol. 15(1), pages 29-48, February.
    4. Scanlan, Mark, 1998. "Using call-back to demonstrate the discriminatory nature of the proportionate return rule," Telecommunications Policy, Elsevier, vol. 22(11), pages 913-930, December.
    5. Cheong, Ken & Mullins, Mark, 1991. "International telephone service imbalances : Accounting rates and regulatory policy," Telecommunications Policy, Elsevier, vol. 15(2), pages 107-118, April.
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    Regulation and international telecommunications pricing behaviour;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications


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