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Working Paper

Competition Policies for the Telecommunications Industry in Korea

페이스북
커버이미지
  • 저자 남일총(南逸聰)
  • 발행일 1997/09/01
  • 시리즈 번호 9708
원문보기
요약 In the past fifteen years or so, the world has been
witnessing a fundamental change in the way
telecommunications industry operates. For many countries,
introducing competition into the telecommunications industry
has proved to be much more than allowing more firms into the
industry. It required the transformation of a monopolistic
government business into a competitive industry, which in turn
demanded the redefinition of the role of the government,
creation of a proper regulatory regime, a new set of rules
governing who could participate in what parts of the new
business opportunity, rules to set rates and access charges, and
so on. The process of transformation in Korea has not been
always orderly and is still unfolding.

The Korean experience seems to present a unique example
of deregulation of the telecommunications industry. First, the
role of the government has not been clearly redefined. The
government opted to allow some private firms into the
telecommunications industry while at the same time retaining
control of Korea Telecom (KT) that had been the monopolistic
public enterprise before deregulation. Thus, the government put
itself in a position to provide services in competition with
private entrants. This is in sharp contrast to the comparable
cases in the U.K. or New Zealand. Second, the regulatory
regime has not changed much from the days of government
monopoly. Third, the omnipresent industrial policies, whose
objectives are sometimes ambiguous, have allowed the
government to intervene in the industry extensively during the
whole process.

The purpose of this paper is to evaluate the deregulation of
the telecommunications industry in Korea and to make some
policy suggestions aimed at improving the efficiency. We also
attempt to explain why the deregulation process has followed
the actual outcomes. Our analysis will also shed some light on
how industrial policies affect competition policies in general in
Korea. After summarizing major events in the deregulation
process, we will analyze the effects of several key policies that
have been employed by the Korean government, from the
policy toward KT, to the policy on entry, rates, access charges,
and on the regulatory regime. We also discuss the industrial
policy of promoting the equipment manufacturing industry. We
argue that the telecommunications industry in Korea is not
really a competitive industry, based upon the analysis of the
past and current policies chosen by the Korean government.

The paper is organized as follows: In section 2, we
summarize the history of the industry from the government
monopoly to the current state. In sections 3, we evaluate the
deregulation process and the current policies toward the
telecommunications industry in Korea. This section focuses on
the effects of past and current policies regarding privatization,
entry, rates, access charges, and the regulatory regime.
Section 4 draws conclusions.
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