Private and State Ownership in Telecommunications

Abstract

This study compared the performance of the Philippine private telecommunications company, the PLDT, and the São Paulo state company, Telesp. The poor performance of the PLDT can be attributed to ineffective political and regulatory institutions resulting in increased political patronage and uncertainty. A weak regulatory and political environment was unable to enforce compliance even with positive incentives. Performance of the São Paulo state company, Telesp, can be attributed to political and economic policies at the national and state level and political/regulatory structure of the Telebras system. Mismanagement and corruption at the ministerial and firm level played a less crucial role in the firm's overall performance than they did in the case of the PLDT.