Pricing in Regulated Industries: The Telecommunications Sector

  • Arthur S. Cayanan UP Cesar E.A. Virata School of Business
  • Ivy DC Suan UP Cesar E.A. Virata School of Business
Keywords: average revenue per user, interconnection rates, pricing, regulated industries, return on equity, return on rate base, tariffs, telecommunications sector, utilities


This paper discusses the factors affecting the pricing of telecommunication services and the pricing schemes used by telecom companies in the Philippines. In spite of the reduced prices mainly brought about by competition, the telecom services offered in the Philippines still remain one of the highest among the Asian countries covered in the comparison. With the acquisition of Digitel by PLDT in 2011 and reducing the sector to two major players, concerns have been raised regarding the prices and the quality of services offered by the remaining players. This is where regulation becomes crucial, but the question remains as to whether the regulatory agency can deliver its mandate of regulating the telecom companies.