THE ECONOMIC-EFFICIENCY OF TELECOMMUNICATIONS IN A DEREGULATED MARKET- THE CASE OF NEW-ZEALAND

This paper estimates the productivity and consumer and producer change s in the New Zealand telecommunications network market between 1987, w hen it was deregulated, and 1993; as the major firm, Telecom, evolved from a government department to a public company in an environment of light regulation. The growth in productivity is estimated to reduced c osts at an annual compound average of 5.6 per cent. The bulk of the su bstantial gains in consumer surplus has come from price reductions on 1987 consumption levels. There has been marked improvements in the qua lity of outputs. Shareholders have had a profitable investment.