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Policy recommendations for mobile telephony development in Latin America

Policy makers should promote interconnection regulation through a model contract for all players, exclusion of fixed-line carriers when possible, and unlimited market entry instead of exclusive licenses to develop mobile telephony in Latin America, according to a working paper recently published by the Inter-American Development Bank's Research Department.

The study, titled Regulation and Competition in Mobile Telephony in Latin America , by Carlos Lapuerta, Juan Benavides and Sonia Jorge, is one of the first three in the new Competitiveness Studies series just launched by the IDB.

The paper addresses three areas of regulatory policy in relation to case studies on Colombia, Bolivia, and the Dominican Republic, as well as general policy recommendations. First, in the area of interconnection regulation, the study recommends a model contract instead of voluntary negotiations. Second, local fixed-line service providers should ideally be excluded from mobile telephony. When this is not possible, they should only participate in geographic areas where they do not dominate local fixed-line service, and they should be required to maintain strict managerial, accounting, and legal separation of mobile and fixed-line activities. Third, unlimited entry into mobile phone markets is preferable to concessions through exclusive licenses or auctions.

The Research Department's new Competitiveness Studies series brings insight to the key issue of competitiveness and its role in achieving development. The series includes two other recently published papers, one on Ecuador's competitiveness after dollarization, and one on the design of competitive wholesale electricity markets for Latin American countries