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AFTER years of exorbitant telephone prices, Mexico's beleaguered consumers are finally getting a reprieve.
The new institutional design led to increased competition in the sector, decreasing the mobile and fixed telephone prices while increasing the coverage and penetration of these services.
But he acknowledged that local telephone prices were considerably higher than the flat rates available in the United States.
The main results indicate that the effects of the reform are not minor; the drop in telephone prices would reduce the general consumer price index by almost 2%, and the value added would increase by more than 3%, benefiting mainly households in the highest income quantiles.
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A decade ago, Alfred Kahn challenged regulators to adopt more efficient telephone pricing policies.
This innovation could unleash a new wave of Internet growth, particularly in Europe, where monopolistic telephone pricing has been a serious barrier.
May 21st saw country-wide strikes against privatisation, especially in the financial sector.Mr Singh had to withdraw cuts in fertiliser subsidies within days of announcing them in his budget at the end of February; telephone-price increases were trimmed back earlier this month; and relaxation of the limits on foreign direct investment has been delayed.
"Today's announcement is a giant step forward in rationalizing pricing," said William E. Kennard, the chairman of the F.C.C. "This is the most dramatic reduction in telephone service prices in the history of this agency".
The media regulator is to investigate why telephone landline prices have risen so fast amid concerns that the elderly and vulnerable are being adversely affected by price hikes.
Most products change and improve over the years: automobiles no longer include a hand-cranked starter; mobile telephone service prices spiral downward as service billing grows simpler.
The regulatory changes that helped the company during the year included the decision by the Federal Communications Commission to set ceilings on telephone call prices rather than on company profits, which allowed A.T.& T. to capitalize on efficiency gains.
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