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Price Regulation in Telecommunications Sector and Its Implications [with Comments]
Abdul Khaliq Awan and Muhammad Saleem
The Pakistan Development Review
Vol. 38, No. 4, Papers and Proceedings PART II Fifteenth Annual General Meeting and Conference of the Pakistan Society of Development Economists Islamabad, November 5-8, 1999 (Winter 1999), pp. 575-586
Published by: Pakistan Institute of Development Economics, Islamabad
Stable URL: http://www.jstor.org/stable/41260192
Page Count: 12
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In this study, an analysis of different pricing methods have been undertaken, i.e., marginal cost pricing, average cost pricing, Ramsey pricing rule, rate of return regulation and price caps. This paper is an attempt to address question of why do we need to regulate telecommunication. Determining reasonable prices for monopoly public service is one of the most important areas in telecom sector. The different standards for judging the reasonableness of prices discussed in this paper—equity, efficiency (rate of return) and improvement performance (CPI-X)—are not substitutes for one another. They provide standards for judgment from different perspectives. The scope of efficiency improvement depends on different factors, which includes i.e., the speed of technological change, the extent to which output growth permits exploitation of economies of scale, the current extent of inefficiency in the business.
The Pakistan Development Review © 1999 Pakistan Institute of Development Economics, Islamabad