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Economic impact of competition policy enforcement on the functioning of télécoms markets in the EU

Completed Project


Firms and Markets

Project Management

Prof. Dr. Tomaso Duso

Project Period

December 17, 2015 - October 31, 2016

Commissioned by

European Commission

In Cooperation With

Analysys Mason, United Kingdom
Learlab, Italy

The purpose of the Study is to explain and quantify the causal relationship between competition policy, competition, and market outcomes in the telecoms sector, on the basis of sound and established econometric techniques. We aim at providing instruments and evidence that may help to improve the effectiveness of competition policy interventions and to inform the public about the effects of competition policy in this crucial and much debated sector of the economy.

The role of competition in telecoms markets has been highly debated in the recent years. The general opinion is that increased competition allows consumers and businesses to benefit from higher quality telecoms services at affordable prices and it hence facilitates take-up by consumers and businesses and prompt investments into infrastructure. On the other hand, some argues that a less strict application of competition rules may allow higher returns and hence higher incentives for investment into new technologies. The European Commission is currently working on a new proposal for an ambitious overhaul of the telecoms regulatory framework focusing on, among many aspects, delivering the condition for a true single digital market. According to the Commission, the creation of a single digital market is an essential step to enhance competition and, in turn, promote investment in advanced digital network and innovative services.

The existing empirical literature provide evidence on the impact of competition in the telecoms sectors. The available studies, however, focus on certain Member States, specific competition indicators (mainly related to market structure) or specific product market (e.g. the mobile market at retail level). Our study relies on both a descriptive and quantitative analysis. The descriptive analysis outlines the evolution of competition policy enforcement and the functioning of telecoms market over the past 20 years. The quantitative analysis empirically estimates the impact of specific competition policy interventions on telecoms market performance. It represents the core of the study as it investigates the existence of a causal relationship between competition policy enforcement and the functioning of telecoms markets. It consists of three case studies, one for each type of competition policy intervention (merger, antitrust, state aid).

DIW Team