Private participation in government-led backbone network projects
This study presents an ex-post comparative assessment of the relative performance of three Latin American broadband network emblematic projects implemented through public-private projects (PPP). Results show that the relative performance of these projects is extremely sensitive to differences in contractual design and regulatory approaches applied in each case. The detailed examination and comparative analysis of these experiences allowed us to extract important lessons in terms of design and implementation of PPP in the telecommunications sector. In particular, our analysis finds that imperfect financing and demand risk allocations in projects can jeopardize their operational and financial sustainability. As well, the examination of these experiences allows us to conclude that in markets characterized by continuous economic and technological transformations, vertical separation restrictions imposed for reducing the risk of increasing market power and concentration may not be justified. As well, analysis shows that in such evolving contexts, a more flexible and adaptable regulatory approach is recommendable. Finally, our analysis reveals the role of complementary policies in the context of the implementation of countries’ digital strategies, as a means that contribute to ensure the accomplishment of broadband accessibility national targets.
Private participation in government-led backbone network projects: Lessons from three Latin American experiments