Telecommunications policy in Turkey: restructuring for economic growth. European Policy Paper #11, November 2006

Burnham, James L. (2006) Telecommunications policy in Turkey: restructuring for economic growth. European Policy Paper #11, November 2006. [Policy Paper]

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Abstract

Introduction. Modern telecommunications technology is now widely seen as a critical driver in economic development. However, the issues involved in the rapid deployment of this technology are complex and frequently highly controversial. While some of these issues are technical, the most difficult ones involve changing a legal and regulatory framework which was originally designed for different times and different technologies. The process of changing this framework necessarily involves disruptive change for existing service providers as well as substantial benefits for the economy at large. This paper seeks to discuss these issues in light of Turkey’s progress to date in taking advantage of advanced available telecommunications technology and the myriad productivity-enhancing services that are associated with it.(1) An important element in developing a more competitive and dynamic sector in Turkey has been the desire of the country to become a member of the European Union. This has encouraged changes in the telecommunications regulatory regime following the guidelines set out in Chapter 19 of the EU “acquis” for candidate members. Nonetheless, substantial further efforts are needed to complete and implement the desired regulatory framework, particularly as it affects the former government monopoly carrier, Turk Telekom, and the cable companies. A further limiting factor has been an overall investment climate in Turkey which has been characterized by a high level of uncertainty for most investors, regardless of size or nationality. Policy recommendations to help accelerate the deployment of telecommunications technology include a clear reaffirmation of the government’s priorities for the sector, a reduction in the level of ownership and regulatory uncertainty, strengthening the Board and Staff of the Telecommunications Authority, and reviewing policies which reduce the scope and increase the cost of telecommunication licenses.

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