The cost structure of Australian telecommunications

Harry Bloch (), Gary G Madden and Coble-Neal, Grant

MPRA Paper from University Library of Munich, Germany

Abstract: Since 1991 Australian telecommunications has undergone substantial reform. To a large extent, the economic correctness of pro-competitive policy depends on the non-existence of natural monopoly technology. This paper provides estimates of the Australian telecommunications system cost structure, and tests for subadditivity from 1943 to 1991. Additivity of the cost function after 1945 rejects the natural monopoly hypothesis and supports recent government policy. Diminished natural monopoly characteristics suggest that co-ordination between firms through networking can achieve similar economies as internal co-ordination within a monopoly. This finding is important, given the trend towards network unbundling, and service provision through interconnection.

Keywords: Cost; structure; of; Australian; telecommunications (search for similar items in EconPapers)
JEL-codes: L96 (search for similar items in EconPapers)
Date: 2001
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Published in The Economic Record 239.77(2001): pp. 338-350

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Journal Article: The Cost Structure of Australian Telecommunications (2001)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:11019

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