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4. Performance evaluation

Every country in the Americas region can claim to have grown its telecommunications sector during the 1990s. Demand for telecommunication services was so high that it would have been hard not to make supply-side improvements. But it is only by comparing one country against another that real progress can be monitored.

One way of measuring performance is to compare the penetration rate of telephone lines and mobilephones with other countries with a similar level of wealth. The relationships are shown in Figure 4 for fixed-lines (top) and mobilephones (bottom). Those countries which are above the "best-fit" line have more telephone lines than would be expected, given their relative wealth, whereas the countries below the line have fewer lines. For teledensity, it is mainly smaller economies which feature above the line while the major economies of the region are below it. For mobile density the relationship appears to be the reverse. For mobiles, the countries above the line generally have multiple players providing mobile service. By contrast, in the smaller economies of the Caribbean, the majority of economies have only one service provider. The lack of competition would appear to be a hindrance to market development.

It is also useful to examine to what extent the performance of a country’s telecommunications sector is changing over time. Among countries which have improved their rankings for fixed-line teledensity during the last decade are several that privatised their incumbent operators in one or more tranches early on, including Jamaica (1989, 1990), Chile (1988, 1989, 1990) and Guyana (1991); one which privatised more recently, El Salvador (1998); and one which has long been privately-owned, St. Kitts & Nevis. This seems to suggest that privatisation can help in improving the national operator vis-Ó-vis other countries that have not privatised. The top performers in mobile service have tended not to do as well in fixed-line service, suggesting that, in the Americas region at least, mobile is more of a substitute than a complement to fixed-line telephones.

In the Americas region, mobile is more of a substitute than a complement to fixed-line telephones

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Updated : 2007-08-28