Foreign ownership in telecommunications: A policy perspective

Abstract

This paper identifies and evaluates a range of arguments for host countries placing limits or restrictions on foreign ownership of facilities-based telecommunications carriers. Both economic and non-economic arguments are inferred and essentially rejected, either because foreign ownership restrictions fail to contribute to their putative objectives or because other policies can achieve the desired objectives at a lower cost to economic efficiency. The paper also considers and rejects a claim that foreign investment in the services sector, along with strategic alliances, obviates any efficiency concerns about foreign ownership restrictions of facilities-based carriers.