Deregulation and Its Effects on Telecom Companies’ Financial Performance

Abstract

This paper discusses the effects of telecom deregulation on the financial performance of listed telecom companies, particularly Philippine Long Distance Telephone Company (PLDT) and Globe Telecom, Inc. (Globe). For purposes of comparing financial performance, the years covered in the study were grouped into three: 1970-1986 representing the period when PLDT was a virtual monopoly, 1987-1995 representing the period when the telecom sector was being deregulated, and 1996-2013 representing the deregulated period. The study shows how PLDT struggled after deregulation and how it fared afterwards. It also shows Globe’s volatility in its operating performance after deregulation. The study also shows how deregulation can improve the offering of telecom services based on the increases in subscribers and keep the surviving players profitable.