European Telecom's Lost Investment: An Analysis of the ECTA Scorecard
Inconsistent implementation of the European telecoms regulatory framework is costing up to €13 billion in lost investment. This brief paper analyses the effect of regualtion on investment and calcualtes a regualtory elasticity of investment.
n this paper we have analysed the results of the ECTA Regulatory Scorecard 2005 (the Scorecard) to establish an elasticity coefficient to estimate the percentage increase in investment for each percentage increase in regulatory effectiveness as measured by the Scorecard. Using this analysis we have calculated how much extra investment in electronic communications networks and services could be expected if all countries saw an improvement in their regulatory regimes.
Our model seeks to explain variation in levels of investment which we define as: telecommunications investment (excluding spectrum fees ) as a percentage of total industry value added . This measures the relationship between investment in telecommunications and the total value the economy adds to all inputs and so normalises investment for the size and effectiveness of the economy.
