Risks and rewards in the globalization of telecommunications in emerging economies

The telecommunications industry in emerging markets has been transformed fr om a collection of mostly state-owned, national companies to one with many privately owned, multinational corporations (MNCs). Using examples from Lat in America, this dramatic reconfiguration is explained as resulting from th e dynamic inter-play between country and firm strategies. it is further arg ued that first-mover MNCs reaped greater profits than late-mover MNCs, wher eas timing had the opposite consequence or host countries. First-mover MNCs had the advantage of buying the incumbent stare enterprise, enjoying monop oly privileges, making preemptive investments, leveraging political connect ions, and adopting entry-deterring policies to minimize competition. But ea rly-reforming countries had to contend with the region's lack of credibilit y with investors by deeply discounting sale price, offering special privile ges and protections, and absorbing risks that late-reforming countries were able to pass on to MNCs. The paper concludes that telecommunications no lo nger offers foreign investors easy riches like those enjoyed by first-movin g MNCs in first-reforming countries. Late-moving firms, especially in late- reforming countries, are exposed not only to governments with higher bargai ning power but also to greater regulatory and competitive risks.