The Turkish telecommunications sector grew rapidly in the 1980s and 1990s
and achieved impressive coverage and usage in a developing economy. The
penetration of wireless communications in Turkey since the mid-1990s has been
dramatic by any measure. However, Turkey has been slow to liberalize the
wireline sub-sector and has witnessed the development of an unproductive
structure in wireless. The result has been sub-par productivity in the sector as
a whole.
Wireline
Rapid telecom growth was initially fueled by wireline growth in the late 1980s and early 1990s. That growth has slowed and monopoly control has meant that the sub-sector has been unable to surpass 66 percent of U.S. productivity levels.
Purposeful - yet methodical - deregulation is necessary to create competition and increase productivity. Policymakers must first develop a set of clear and comprehensive objectives. Then they must fully empower the regulator to create a resilient framework for access by new competitors. The template can be made clear, but much more analytical work and consensus building needs to be done. The goal must be to create a sustainable competitive environment that will substantially increase usage in Turkey.
Wireless
As dramatic as growth has been, wireless productivity is worse than in wireline. License terms promoted over-investment in infrastructure. Though competition exists, regulatory flaws limit its intensity. And so carriers lack incentive to introduce new services or to lower their prices.
Unfettered national
roaming - a service offered in almost every developed market - is not yet a
reality. Interconnection rates between operators are substantial, and barriers
to switching are high for consumers since they cannot keep their phone numbers.
Addressing these specific problems will boost productivity. Turkey has the
potential to achieve productivity rates close to 90 percent of the U.S. Launch this chapter (PDF - 507 KB)
