New information and communication technologies have been major drivers of efficiency not only in the ICT industries but also in the downstream industries. The liberalisation of the telecommunication sector was one of the main reasons for the rapid diffusion of new products and processes. On account of the increasing levels of complexity in several industries it can be assumed that governmental interventions in key sectors like the telecommunication sector could have an effect on other industries. The goal of this project is to identify potential spillovers of innovation and investment behaviour in telecommunication markets. The main goal should be achieved in three closely- related steps.

1. State Interferences and Infrastructure Investments
The pre-requisite for the development of newer or significantly changed telecommunication services is the provision of an infrastructure which allows the implementation of services. An adequate quality of the infrastructure is the basis for an efficient transmission of an ever-increasing amount of data. For this reason, first of all the direct impact of regulatory interferences on investment and infrastructure capacities need to be analysed. Accordingly certain factors are identified, which on one hand influence the effects of regulation and on the other hand they themselves have an impact on the infrastructure investment.

2. Infrastructure Investments and the Effects on Companies benefiting from Innovation
In the second step the impact of telecommunication investments on the innovation behaviour of companies that are benefiting from them should be examined. The increasing importance of ICT in business processes and in the communication industry has been documented a multiple numbers of times. Thus the differences in the meanings of telecommunication investments for different industries and countries are compiled and analysed on an aggregate level.

3. Impact of State Interferences on Share Prices
The final part of the project deals with the question of how governmental interventions influence the behaviour of investors. Investors have high demands on companies with regard to decisions concerning value enhancing investments. As mentioned in the first step, investments- especially for transmission equipment- are dependent on regulatory measures. This is because they significantly influence the time frame of refinancing the investment. In order to make statements with respect to the behaviour of investors because of regulatory decisions, the effects on the share prices of the largest telecommunication companies in Europe will be studied.

Allowance

Deutsche Telekom AG, Bonn, DE

Project duration

01.09.2007 - 31.01.2010

Contact
Project members

Dr. Georg Licht (Coordinator)
Dr. Tobias Veith