The Impact of Regulations on Investment in Mobile Telephone Infrastructure in Southern African Development Community Countries

Albert Makochekanwa

Working Papers from African Economic Research Consortium

Abstract: The main objective of the study was to investigate the impact of policy regulations on investments in mobile telecommunications network infrastructure in all the 15 member countries of the Southern African Development Community (SADC) region. The research employed panel data econometrics to achieve its stated objective. Estimated results shows that the coefficient of gross domestic product (GDP) per capita is positive and statistically significant, implying that an increase in this variable results in increase in demand and this in turn motivates infrastructure investment in mobile telephone. The coefficient on the previous level of mobile telephone infrastructure investment variable (Invkt-1) was found to be positive and statistically significant. This means that there is a systematic positive association between the previous level of mobile telephone infrastructure investment and the current. The coefficient of the main variable of interest representing mandatory unbundling (Regkt) was found to be positive and statistically significant. This implies that, overall, mandatory unbundling access regulation boost infrastructure investment in mobile telecommunication. Regression estimates shows that the coefficient on one of the variable of interest, political constraint (POLCON) has a negative and statistically significant impact on determining the level of mobile telephone infrastructure investment in SADC countries. Whilst this result is against expectations, one possible explanation may be presence of high level of rent seeking behaviour

Date: 2020-01-09
Note: African Economic Research Consortium
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