Fibre: Taking the Right Steps
The telecoms infrastructure and services we have today are largely a result of investment by new entrants, spurring incumbents to respond to protect their revenue base. Regulation has enabled competition by, accidentally, allowing sufficient profits in the market to encourage competitive investment. However, regulators are now at risk of jeopardising critical infrastructure investment by applying the same economic principles to a radically different market environment. A focus on short-term price reductions risks deterring infrastructure investments by entrants. Without investment by entrants, incumbents have little incentive to respond and can continue to enjoy a quiet life.